Armenia is a semi-presidential republic. The president is the head of state, and enjoys wide powers. The government exercises executive power, and is composed of ministers led by a prime minister.
The single-chamber National Assembly (parliament) is the supreme legislative authority of Armenia. The parliamentary majority nominates the prime minister, subject to approval by the president and after consultations with parliamentary factions. The president appoints and dismisses members of the government (ministers) based on the prime minister's recommendations.
There are two levels of territorial authority in Armenia – the central government (karavarutyun) and the local level – community (hamaynk). The regional/provincial administration is part of central government; there is no separate budget or plan for this level of authority. A state representative is appointed for each province (marz). The provincial administrations (marzpetaran) de-facto operate as intermediaries between local citizens and community-level authorities, on the one hand, and the central government, on the other. Governors of provinces are nominated by the prime minister, subject to approval by the parliament.

The community level is the only self-government level in Armenia. Armenia is divided into 915 communities, including 866 villages, 48 towns and the capital Yerevan. Each community, with the exception of Yerevan, elects its major (via a direct system) and a legislative body (municipal council) called a 'council of elders' (avaganu khorurd). Every community in Armenia elects its own municipal council (legislative body).
Yerevan is a single community with a different law: it elects its municipal council via a proportional representation system, and the council then elects the mayor. Yerevan's municipal council is elected based on party lists (proportional vote). In Yerevan, the person who heads the list of the party that won over 40% of the vote automatically becomes mayor.

Local authorities include the municipal council (council of elders) and the head of the community (mayor) who heads the community administration.
The mayor nominates members of the community administration subject to approval by the municipal council. In small communities it often happens that the council does not in fact have any leverage over the appointment of administrative staff.
Key stages in the evolution of local governance legislation

• 1995 – Adoption of the Constitution of Armenia that established the local governance system
• 1995 – Creation of the modern administrative-territorial division of Armenia
• 1996 – Adoption of the Law on Elections of Local Self-Government Bodies; conducting the first elections to local self-government bodies
• 1997 – Adoption of the Law on the Budget System, which includes items regulating municipal budgets
• 1998 – Adoption of the Law on Financial Equalization, which defines the amounts and procedures for allocating state subsidies to municipalities
• 1999 – Adoption of the Electoral Code, including items regulating elections to local self-government bodies
• 2002 – Armenia's ratification of the European Charter of Local Self-Government
• 2004 – Adoption of the Law on Municipal Service
• 2005 – Amendments to the Constitution, including more freedom for communities to set their own taxes and the establishment of the capital city Yerevan as a separate community (beginning in 1995, each of Yerevan's districts is a separate community)
• 2007 – Launch of a digital Community Management Information System by the Ministry of Territorial Administration of Armenia with support from GTZ (Deutsche Gesellschaft für internationale Zusammenarbeit). By mid-2014, more than half of local communities had been using this system
• 2008 – Adoption of a Law on Local Self Government in Yerevan City, finally implementing the decision of the 2005 constitutional amendments. Under the new law, the city of Yerevan became a community, whereas the districts of Yerevan lost the status of communities
• 2008-2010 – Amendments to the Law on the Budget System, which increased the levels of discretion of local authorities
• 2008-2014 – Preparations to implement a reform that envisaged merging small communities across the country in order to enlarge communities and reduce their overall number
• 2013-2014 – The Freedom of Information centre of Armenia and the Committee to Protect Freedom of Expression recognized the Ministry of Territorial Administration as the most open state body in Armenia
• 2014 – The Ministry of Territorial Administration was merged with the Ministry of Emergency Situations. The minister of territorial administration resigned, the former deputy minister became deputy minister of the merged body, thus becoming the de-facto head of territorial administration, albeit without ministerial rank
   

Chapter 7 of the Constitution is dedicated to Local Self-Governance, which includes the following:

• Article 104: 'Local self-government shall be exercised in the communities'. [...] Article 104.1: 'A community shall be a legal entity, have the right to own property and other economic rights'. […]
• Article 106: 'The community shall generate its budget independently. […] Communities shall establish local taxes and duties within the scope defined by law. Communities can set forth fees for their services'.
• Article 110: 'The law shall define the principles and procedures for consolidation or separation of communities, as well as the terms for the election of local self-government bodies of the newly- formed communities'.
  

Armenia also has a law on 'Local Self-Government', which contains the following:

• Chapter 7 of the Law on 'Local Self-Government' is dedicated to relations between state and local government bodies. It lists the governmental units in the communities (head of the community, Yerevan mayor, and the municipal council).
• Chapter 2 describes the functions of the municipal council.
• Chapter 3 describes the status and functions of the head of the community and their administration, while Chapter 4 defines the power of the head of the community.
  
  

Chapter 5 of the Law on 'the budgetary system' defines the procedures for the composition of local budgets and expenditures.

Chapter 2 of the Law on 'taxes', which was added in 2010, describes the size of local taxes. Article 13.2 states that a community collects land and property tax, but its size depends on its cadastral price and can be reviewed in some cases by the community in each particular case.

According to the law, a budget is proposed by the municipal council and by the head of the community. The law stipulates that the budget draft must be discussed with any members of the community who wish to participate in the decision-making process. In practice, the budget is usually decided upon by the mayor.
The involvement of the municipal council in the process is usually minimal, mostly due to low motivation. The community council members are not paid; besides, in most small communities, the budget expenditure is composed primarily of administrative costs (up to 90% for communities with less than 500 inhabitants), so that there is little or nothing to discuss.
Community incomes are composed mainly of land tax, property tax, tax on hotels, license payments, compulsory payments of goods, services and rendering a service. Central government sets the margins (minimum and maximum value) of the land and property tax however, the right to decide the size and basis for these taxes belongs to the community. Local administrations mostly rely on these mechanisms when drafting the budget. They are also allowed to draw on other sources of income ()
Local government bodies perform some state service functions (like primary and pre-school education). The relevant costs are covered by transfers from the central budget. State obligations and administration costs take up most of the communal budgets.

1.1. Central level

• Directs local executive bodies on certain issues;
• Controls local bodies in the field of law enforcement;
• Creates conditions for the training of local bodies employees;
• Assists local bodies in the organization of their activities;
• Delegates their powers to local bodies, if necessary
• Appoints regional governors and delegates tasks to fulfil national policies at the regional level/
  

1.2. Regional level

The territory of the Republic of Armenia is composed of ten marzes (regions) and Yerevan city which is governed by the law on local self-government in the city of Yerevan. Public administration in the marzes is governed by RA President’s decree “On public administration in the marzes of the Republic of Armenia” and other legal acts.

Marz governors implement the regional policy of the government. They coordinate the activities of local branches of the executive authority, except as otherwise specified by law.

Within the bounds of the authority they are vested with by law, marz governors carry on the government’s regional policy in their respective marzes in the following areas: finance, urban development, housing and utilities, transport and road construction, agriculture and land use, education, healthcare, social security, culture and sports, nature and environmental protection, commerce, public catering, and services. Regional policy in the foregoing sectors is carried on by means of marz administrations, as well as through subordinate organizations.

Marz governors coordinate the activities of regional services of central executive authorities in the areas of internal affairs and national security, defense, communication, energy, taxes, emergency situations, civil defense and others.


The Yerevan Mayor with the approval of the majority of the Yerevan Council shall:

• Name and rename streets, avenues, squares, parks, city-subordinate educational, cultural and other enterprises and organizations of Yerevan;
• Regulate activities of agencies and organizations involved in commercial and service activities in Yerevan, in accordance with the legislation; 
• Define the regulation for granting the title of the “Honorary Citizen of Yerevan” to citizens and non-citizens of the Republic of Armenia;
  
  

1.3. Local level

A Community Council shall:

• Approve development program of the community;
• Approve the community budget, amendments thereto proposed by the Chief of the Community and the statement on execution of the annual budget;
• Supervise the performance of the community budget and the use of loans and other financial resources received by the community;
• Initiate and appoint a local referendum in accordance with the order defined by the legislation; 
• Supervise the decisions taken by the Chief of the Community in respect of their compliance with the existing legislation and decisions of the Community Council;
• Take decision to form intercommunity unions, as well as submit a proposal to the authorized state body on establishment of a new community through merger with other community;
• Define its representative in the Council of intercommunity association;
• Take decisions on receiving documents not containing legislatively defined confidential information from state bodies and officials, which concern the community;
• As prescribed by the law take decisions on establishment, restructuring and/or liquidation of budgetary institutions of community subordination, commercial and non-commercial organizations with community participation in accordance with the legislation;
• In its decision, issue its agreement to the candidates to assume the posts of directors of budgetary institutions and non-commercial organizations proposed by the Chief of the Community; 
• In accordance with the procedure defined by the legislation of the Republic of Armenia approve the composition of Boards and supervisory councils of commercial organizations with the community participation. The number of members of such bodies proposed by the Community Council may not be more than half of such members;
• Define the community rules for operations of agencies and organizations in the sectors of trading, public catering and services in compliance with the respective legislation;
• Define the rates of local duties and fees set by the legislation;
• Define the rates of services delivered by the Community;
• Take decision on lease or alienation of the property owned by the community; approve rates of rents, alienation prices and terms as well as the floor price of a property to be alienated through an auction;
• Take decision on naming or renaming of streets, avenues, squares, parks of community importance and educational, culture and other enterprises and organizations of the community subordination;
• Ratify cooperation agreements concluded with other communities of the Republic of Armenia and other states in its decision. With the objective to coordinate the activities of the communities, as well as represent and protect common interests, take decision on membership in associations created by communities and paying the respective membership fees;
• Take decision with regard to attraction of loan and other legitimately borrowed resources;
• In accordance with the village and city regulations, take decision on granting and recalling by the village and city councils of the title of Honorary resident of the community to the citizens of the Republic of Armenia and those of foreign countries;
• Take decision on coat-of-arms of the community;
• Approve the number, staff list and official rates of remuneration of the staff of the Chief of Community and budgetary institutions;
• Approve the master plan for community urban development, land zoning and use scheme; drafts of detailed planning of individual districts and construction complexes, and drafts of planning and maintenance of historical and cultural sites;
• Approve the urban development charters of the settlements;
• Approve annual inventory list of the property of the community;
• Submit proposals to or agree with the authorized state body in respect of renaming the community.

The Chief of a Community shall:

• Submit the community three-year development program to the Community Council for approval;
• Approve the charters of his Staff, as well as those of the budgetary and non-commercial agencies and institutions;
• Submit the draft decisions on the structures of the staff and budget institutions, as well as amendments thereto, to the Community Council for approval;
• Submit the draft decisions on the number of staff and staff lists and rates of remuneration of the staff and budgetary institutions, and amendments thereto, to the Community Council for approval;
• Submit the draft decision on creation, restructuring and/or liquidation of budgetary and non-commercial agencies and organizations of community subordination to the Community Council for approval;
• Submit the draft decision on composition of councils and supervisory boards of the commercial agencies and organizations of community subordination to the Community Council for approval;
• Submit for the approval of the Community Council the draft decision on holding a local referendum;
• Conclude cooperation agreements with other communities of the Republic of Armenia and other states, submitting them to the Community Council for ratification. Submit the draft decisions on establishment of intercommunity associations, as well as membership in associations established by other communities and payment of relevant membership fees to the Community Council for approval;
• Submit the draft decisions on alienation of the community property to the Community Council for approval;
• Submit a proposal on awarding the Honorary Citizen of the community to the Community Council for approval;
• Submit a proposal to the Community Council for approval on naming and renaming streets, avenues, squares, parks, educational, culture and other enterprises and organizations of the community's subordination (except for the historical, cultural and natural history monuments);
• Define the numbering of the community buildings and structures;
• Take decisions, issue directives and compile minutes within its jurisdiction;
• Independently and at its own responsibility, organize and govern the process of implementation of the duties delegated by the state in accordance with the legislation or procedure defined by the Government;
• In accordance with the legislation or procedure defined by the Government, conduct urban development, nature protection, agricultural and other cadastres of community importance;
• Take measures in accordance with the legislation or procedure defined by the Government in respect of organization of civil defence, anti-epidemic and quarantine measures and reduction of the risk of technological and natural disasters and elimination of their consequences;
• Exercise other powers specified by the Constitution and this Law.​