This paper presents the issues of the basic premises and values of the 1998 public administration reform. It attempts to comprehensively present the idea of a political reform in Poland. Moreover, the article touches upon the issues of the political breakthrough of 1989 which led to the restitution of the municipality self-government. Pursuant to the act of March 8, 1990 on local self-government (currently the act on municipality self-government), the then-existing system of national councils was replaced by a system of municipality self-government based on different premises. The act departed from the system of uniform state authority. Specific municipalities returned to the organizational and political system of the country. Establishing municipalities was the first element in reforming Polish public administration. In 1997 the idea of a local self-government was raised to the rank of constitutional founding rules (Constitution of the Republic of Poland from April 2, 1997). The two-tier territorial division existing until 1998 presented many irregularities. Provinces as territorial units were not regions in the geographic, spatial nor historic meaning. There was a large economic diversification between specific provinces. Next to wealthy provinces there were those without financial means necessary for development. Governors were not authentic hosts of the region; they were merely field representatives of the government and the Council of Ministers did not run inter-regional politics. Thus, it became necessary to clearly divide responsibility among local, regional and central bodies of public authority. In 1998, further decentralization of tasks and competences occurred in favor of the territorial self-government. Further tiers of territorial self-government were created,which was coherent with the fundamental purpose of the reform, i.e. with restoring a three-tier territorial division including municipalities, districts and provinces. Next to municipalities, districts became the second unit of local authorities whose tasks exceed the possibilities of a municipality. However, they were not equipped with supervising competences over municipalities. The district became a type of ‘link’ between the municipality and the state administration. As a result of the 1998 reform, the notion of ‘province’ was maintained in Polish legislation. The term was given a broader meaning in comparison to the previous legal regulation – the act of March 22, 1990 on territorial bodies of state administration. Currently, ‘province’ denotes mainly a unit of state territorial division, aspecified territory encompassing an area of several districts and, at the same time, the largest unit of state division for the purposes of public administration. The assumption accompanying the 1998 decentralization reform was for self-governing provinces to become counterparts of regions in European countries. The public administration reform cannot be deemed as a finished process because there is no ‘final’ political model. The political state changes dynamically; thus, the need to carry out reforms will appear every now and then.