In an aim to contribute to already existing knowledge upon the subject of smart cities and the public sector’s wider knowledge in Europe, this study investigates the perception by the municipalities and the wider public sector, responsible for implementing smart solutions in the environment. The understanding of the concept of smart cities/villages by municipalities is on a low level due to the fact that the problem is too wide, not well described, solutions even wider, accompanied by the lack of experts able to offer comprehensive solutions to municipalities. The study presents factors according to the current municipalities’ knowledge (environmental awareness, knowledge and prior experience) and the existing market, of whether these factors can be said that affect the acceptance of smart cities. The public is already aware of the smart cities as a general concept, however, the study sheds light upon the established knowledge that the decision makers have in five countries, Hungary, Slovakia, Italy, Lithuania, and Denmark.