The study scrutinizes the development process of small town in polish region,?Lower Silesia. It analyses an original data set of all 56 units. Final analysis considers period?2012-2018. The conducted analysis based on taxonomic method that examines local?explanatory factors towards territorial aspect of development. The evidence from the research?shows that small towns can be important link in regional settlement unit, but only those who?developed specific, endogenous function performing well and respond to changing economic?patterns and economic globalization.