Research on shrinking cities shows continuous links between this phenomenon and the process of urban decline, which has been analyzed in many works, especially in Greece. The impact on urban development can be positive, while population growth over time is characterized by the degree of its convergence. The aim of this study is to gain a deeper understanding of the challenge of urbanization in large cities. The sample used in this effort consists of 117 Greek cities with more than 10,000 inhabitants in 1994, using econometric tools to identify settlements using Markov chain theory with data from 1994 to 2020 from the Hellenic Statistical Authority. Using Urban Hierarchy Research (UHR), a significant decline in Greek Urban Concentration (GUC) and a continuous increase in the population of small- and medium-sized cities were found. The Greek urban system is moving toward a distribution characterized by the seeding of relatively large cities. The study aims to open a broader research discussion in the field of spatial econometric applications.