One of the most important developments of the last decades in terms of government modernization and democratization has been the movement toward the building and strengthening of the local governance throughout the world. The process of decentralization is important and it is in the same time a critical component of the condition which countries must fulfill in order to accede to the European Union. In this particular context die process of decentralization follows a general principle that is disarmingly simple and yet quite effective. This is principle of subsidiary, which at its simplest states that every function should be assigned at the lowest level at which it can be undertaken effectively.