The topic of this graduate thesis is related to the trending topic about the administrative-territorial organization of the Republic of Croatia. The work is conceived and divided into two chapters. The first part of the paper presents the factors and conditions which are determing the general principles of territorial organization. Also, a comparative approach presents the territorial structures of democratic developed countries. The second part deals directly with the issues of the administrative and territorial organization of the Republic of Croatia. Although there is no general agreement regarding the reforms, there is a public, media and expert discussion about the possible reorganization of the local and regional self-government system for a long time. The current system is characterized by excessive and complex territorial organization, poorly utilized potentials and a highly centralized way of managing where local and regional units largely depend on central government. Potential reforms, the ambition of decentralization and giving greater authority to lower levels of governance are both as political, so as social procedures that could heavily affect the living of the Croatian inhabitants, in a more positiv way. However, a good, efficient and cost-effective administrative-territorial organization can be a powerful catalyst of Croatia's economic and social progress. With Croatia joining the European Union in 2013, the door was wide opened in the form of assistance to finance capital projects of local and regional units from the EU Structural Funds. The closing chapter of this graduate thesis refers to the reforms of the Croatian administrative and territorial structure, suggestions to improvement and possible methods to develop a more efficiently system.