ENThis paper is aimed to analyse institutional models of Lithuanian local government in interconnection with centralization/decentralization processes employing explanatory and conceptual frameworks defined by Schneider (2003) and Ozman (2014) that distinguish three decentralization dimensions: fiscal, political and administrative196, presents a two-fold analysis of the Lithuanian territorial reform and the evolution of internal municipal institutional arrangement. Theoretical approach of historical institutionalism is used, and expanded upon, re-constructing two "samples" of critical junctures: one that corresponds to the territorial reform, and one that shows the changes of institutional arrangements. Sub-optimal consensuses and drawing path dependency trajectories are depicted. Through these sets of critical junctures, political discussions regarding the ideas of territorial reform and internal institutions and changes in the legal system, experiences are discussed and analysed. The timeframe of analysis is broad - from the very beginnings of actual local government back in 1994-1995, to 2016. A number of challenges connected with political culture, political participation, and accountability are observed. The overall task of the paper is to analyse the developments in both territorial and institutional structure of the Lithuanian local self-government, and present them within the approach of historical institutionalism, drawing path dependencies towards the current sub-optimal consensus from the historical critical junctures of various reforms. The paper is based on the analysis of legal acts, put into historical perspective.