This paper will present the emergence of local and regional self-government units and their development throughout history, especially in the Republic of Croatia. It will also analyse the historical origin and development of local units from former local communities, as well as the conditions and principles according to which they operate. Local self-government in the Republic of Croatia has gone its way from the post-socialist phase, through the adoption of several laws and its territorial division, to the organisation of local self-government, along which counties are defined as units of regional self-government. The process of decentralisation and modernisation of public administration in Croatia and its adjustment to the European standards and processes began with the creation of the independent Croatian state, but more specifically took place somewhat later. During the fulfilment of the conditions for membership in the Council of Europe and the European Union, an important role and a huge burden was filed by the public administration, which changed significantly during the process of joining the EU. The Constitution of the Republic of Croatia guarantees the right to local and regional self-government and advocates the important principle of subsidiarity, as one of the fundamental ones, although Croatia is still a centralised country. Finally, the City of Sveta Nedelja in Zagreb County will be studied as the flagship of the Croatian system and a model of a modern, decentralised unit of local and regional self-government. This small city shows how local self-government can take big steps into the modern future successfully and without difficulties - with full transparency, with modern technologies and educated staff - for the benefit of its citizens and the entire community.