This chapter examines the fiscal and governance structure of municipalities in the Czech Republic, a highly fragmented country with over 6,250 municipalities. It outlines the evolution of local government since 1990 and the dual nature of municipal responsibilities—independent and delegated. The analysis focuses on municipal revenue sources, including shared taxes, local taxes, and transfers, highlighting limited fiscal autonomy due to the tax-sharing mechanism. Using the LoGICA Framework and Local Autonomy Index, the chapter evaluates multilevel governance and presents a case study on the link between fiscal autonomy and electoral competition. Findings show that municipalities with uncontested elections rely more on transfers, indicating lower autonomy and reduced democratic accountability. Despite legal and institutional independence, Czech municipalities face weak incentives for economic development.