The first effective measures to set up any form of local government were taken after the provinces were established under the New Zealand Constitution Act of 1852 (U.K.) and made responsible for local government. The provincial councils adopted various approaches, with the result that, by 1867, 21 municipal local government units had been constituted under no fewer than 14 separate provincial ordinances. Some of these purported to vest municipalities with powers which, although undoubtedly necessary, were beyond the legislative jurisdiction of the provincial councils. The General Assembly rectified this state of affairs by the Municipal Corporations Act of 1867. In addition to regularising the position of the 21 municipalities already established, the Act served as a blueprint for the constitution of additional ones by the provincial councils. It provided that any such new boroughs should not exceed an area of 9 square miles which must contain not fewer than 250 householders.
The Municipal Corporations Act of 1867 succeeded in being passed because it regularised existing municipalities and contained no proposals for new taxation. Its projected rural counterpart was much more far reaching. It was proposed that it should repeal all provincial legislation establishing road and highway districts, provide a new system of counties and reconstituted road districts, and institute a uniform system of finance for them. This Bill was not passed by the General Assembly.
Upon the abolition of the provinces in 1876 the central legislature became wholly responsible for local government administration and the way was open for a uniform approach to the whole question. The Municipal Corporations Act of 1876 reconstituted 17 boroughs already constituted under the 1867 legislation and provided that 19 others, originally established under Otago provincial ordinances, be reconstituted upon petition of 50 ratepayers in each instance. The greatest changes, however, were made in rural local government. Three hundred and fourteen road boards or their equivalents originally established by the provinces were in existence, some ridiculously small. One Taranaki board had a total revenue of only £14 in 1875. The Counties Act of 1876 divided the country into 63 counties. While it did not abolish road boards, it clearly placed them in a subsidiary relationship to the counties, a relationship intended to lead to their gradual disappearance and the consolidation of rural local government in larger county units. This latter aim has been only partly successful. Although road boards have now practically disappeared, the number of counties had increased to 129 by 1929. Even today 115 controlled by county councils still remain. This fragmentation of the county structure was caused almost entirely by conditions applying to Government subsidies and loans. Maximum subsidy limits introduced in 1885 meant that the land area included in a given county would be eligible for a larger total amount by division into smaller counties, each of which could claim the maximum. The limitation of Government lending to individual counties, introduced in 1886, accelerated the trend to division.
The desire for some form of local authority suited to the needs of smaller settlements led to the enactment of a Town Districts Act in 1881. Town districts were limited to areas not constituted as boroughs, not exceeding 2 square miles, and containing not fewer than 50 householders. Their establishment led to some friction between town boards and county councils over the division of functions. Accordingly, in 1906, it was enacted that no town district with a population of more than 500 should form part of a county. Urban settlements arising in counties are now commonly first constituted as county towns.
The administration of certain local activities by special-purpose authorities has long been a feature of New Zealand local government. Their numbers are usually attributed to the multiplicity and consequent weakness of the territorial authorities. While this has undoubtedly been a major factor, especially since the turn of the century, the origin of some can be traced back to the days of provincial government, while others date from the inception of the present system of territorial local authorities.
Experiments with the control of harbours by specially constituted local authorities were carried out as early as the 1860s, and in 1870 a Harbour Boards Act empowered provincial superintendents to establish harbour boards. The year 1876 saw the first legislative provision for the supervision of rabbit destruction by boards of trustees and in the same year a Christchurch Urban Drainage Board was in existence. Even if the very numerous local authorities involved with education and with minor functions, such as the control of domains, cemeteries, public halls, and the like are excluded, the types and numbers of special-purpose authorities have steadily increased over the years until today there are more than 20 types totalling over 600 separate authorities.
Notwithstanding some small reduction in the number of territorial authorities in recent years, a reduction resulting mainly from the decrease in road boards and town councils, the total number of local authorities has increased steadily because of the greater number of special-purpose authorities. This is one reason why there have been two parliamentary inquiries since 1944 into the structure of local government generally.