The paper analyzes the legal framework of local and regional self - government, which consists of European and domestic regulations. The first part of the paper analyzes the emergence and development of local self-government through changes to the Constitution of the Republic of Croatia and the implementation of EU legislation. Further elaboration deals with the significance of the European Charter of Local Self-Government and the comparison of the Charter with the Constitution and local self-government laws. In addition to the above regulations, the legal framework consists of: the Local and Regional Self-Government law, the Local Elections law and the laws governing the financing of local self-government. The paper is based on the analysis of the mentioned regulations, but also on the recommendations that are necessary for further and better development of local self-government. Emphasis is placed throughout the work on certain institutes and amendments to the provisions of the same that have been adopted by recent changes. Starting from the fact that the reform of local self-government is necessary, the thesis of the paper is whether the legal framework is the fundamental and only factor that enables the development of local self-government. The paper analyzes the general structure of local self-government as well as a specific part of it: elections and funding. Attention is drawn to the topicality and problems of the system of direct elections, as well as the insufficient use of the possibility of direct decision-making of citizens.