Croatian local government is organized in a two-tier system with a polytypic structure. On the first level are cities and municipalities with municipality and city mayors. On the second level are counties with some county prefects. The first level is charged for typical communal tasks, such as waste management, water supplies management, maintenance and social housing, urban planning, etc. On the second level are counties, which are charged for the coordination of urban planning of local units from the first level, and support for the local units from the first level in organization and managing of the local tasks and duties relating for everyday life of people in local communities. But responsibilities, tasks, and duties are not so clear defined, so it exists overlap between these two levels of local self-government. The second question, which is related on processes of decentralization, is a question of role of sub-municipal government in local government of Croatia. This text will be analyzing possibilities of reform of these two levels of local government, and suggesting possible solutions for settlement of those problems.