The purpose of the administrative and territorial reform in Ukraine is, first of all, to give broad powers to communities for their development, as well as to balance the quantitative parameters of administrative and territorial units of different sections. In the process of implementing the reform, the status and functions of most settlements are also changing, which will affect their social and economic development and change inter-settlement ties.
 The article analyzes the quantitative parameters of the modern administrative and territorial system in Ukraine. It is noted that it was not possible to eliminate significant disparities in the size and population of the newly created districts and territorial communities. It is also noted that the agglomeration will take place around district centers, other urban settlements, less often - around large villages. It is emphasized that only the villages that will become community centers have prospects for further preservation of their functional significance in the settlement system.
 In general, 47 cities and almost 440 settlements will not become community centers. There are also cases of classifying urban settlements as rural territorial communities. 354 urban settlements, which had the status of district centers before the reform, now have the status of centers of territorial communities. As a result, the powers of such cities extend to a much smaller number of settlements, and their functional significance will decrease. Service functions and a role in the resettlement system will also be lost to settlements that do not become community centers but are attached to urban ones.
 The article substantiates that the reform of the district level of administrative structure involves a change in the direction and intensity of inter-settlement ties. In conditions of prolonged social and economic stagnation, demographic crisis and unsatisfactory transport connections, this may lead to a deepening of polarization in the settlement system and an increase in peripheral areas. Some medium-sized cities that had the status of cities of regional significance (among them – Novovolyns’k, Horishni Plavni, Enerhodar, Smila, Irpin’) will not be district centers, because the limiting factors for granting them the status of district center are the asymmetric position or mono-function structure of the economy. For most small towns that have lost the authority of the district center, there is the alarming possibility of losing the status of the city. At the same time, in sparsely populated Polissya, steppe or mountainous areas, such small urban settlements will become the centers of enlarged districts, so their functional significance will increase. The condition for the effective performance of the cities-centers of their functions is the development of industrial and social infrastructure, transport connections with remote settlements.
 According to the results of the study, positive and negative aspects of the impact of the administrative and territorial reform and changes in the status and functional significance of settlements have been identified. Further research on this issue will include a detailed analysis of the functioning of territorial communities and new districts in the context of the impact on the settlement development.
 Key words: decentralization, territorial community, resettlement, administrative and territorial reform, functions of settlements.
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