The government of the Republic of Latvia started to grant the rights of a town from 1920. The project of the borders was prepared by a special committee which also included the representatives of the municipalities that were involved. On January 2, 1920 the government of the Republic of Latvia granted the rights of a town to three settlements: Rujena, Smiltene and Aluksne; in March of the same year the rights of a town were granted to the Riga Jurmala settlements. They were merged into one municipality with the name Riga Jurmala. Krustpils settlement became a town on June 10, 1920 and Valka became a town on November 22. Kraslava settlement became a town on July 14, 1922 and Vecauce settlement became Auce town in 1924. During the following few years Ainazi, Livani, Madona and Plavinas settlements also became towns*.

*20th century Latvian history. Volume II. The independent state. 1918-1940 '. R., 2003

On and by the decision of the Saima of February 11, 1928 the rights of a town were granted to Salacgriva and another 15 settlements: Vecgulbene was renamed to Gulbene whereas Strenci, Karsava, Preili, Varaklani, Balvi, Sigulda, Mazsalaca, Vilani, Priekule, Ogre, Viesite, Ape, Ķemeri un Lejasciems retained their names and became towns thus the settlements in Latvia ceased to exist as administrative formations.

Zilupe was granted the rights of a town in 1931 and several years afterwards the same honour was granted to Jaunlatgale (Abrene) and Grostini. The number of towns in Latvia reached 60. 22 of them were in Vidzeme, 14 were in Latgale, 13 were in Kurzeme and the rest of them that is to say 11 were in Zemgale. In terms of the size and the number of the inhabitants the towns varied greatly. The international standard of a city was met only by Riga for the average city qualified Liepaja, Daugavpils, Jelgava, Ventspils and Rezekne and for small towns 27 others. The rest could not even be considered a town under the international assessment system due to the small number of the inhabitants*.

*20th century Latvian history. Volume II. The independent state. 1918-1940 '. R., 2003