Actual social and economic development of Ukraine stipulates for intensification of reforms of all spheres of public activity. The most important problems are in general further democratisation of public affairs and particularly – rationalisation of public administration, imporevement of financial system, implementation of new innovation model in economy, administrative and territorial reform etc. Realization of these questions is closely connected with division of responsibility between central and local authorities, subsequent development of local self-government of Ukraine. At the same time it is necessary to take into consideration that official strategy of Ukrainian state is integration to the European Economic Community. In view of this the aim of research and generalization of European practice of decentralization is arising within the scope of principal objective of improvement of existing methods of administration and decreasing of disproportions in territorial development.