Municipal incorporation occurs when such municipalities become self-governing entities under the laws of the state or province in which they are located. Often, this event is marked by the award or declaration of a municipal charter. A city charter or town charter or municipal charter is a legal document establishing a municipality, such as a city or town.
In Canada, charters are granted by provincial authorities.
The title "corporation" was used in boroughs from soon after the Norman conquest until the Local Government Act 2001. Under the 2001 act, county boroughs were renamed "cities" and their corporations became "city councils"; other borough corporations were renamed "borough councils".
After the Partition of Ireland, the corporations in the Irish Free State were Dublin, Cork, Limerick and Waterford (county boroughs) and Drogheda, Kilkenny, Sligo, Clonmel, and Wexford (non-county boroughs). Dún Laoghaire gained borough status in 1930 as "The Corporation of Dun Laoghaire".Galway's borough status, lost in 1840, was restored in 1937; it was formally styled "the Mayor, Aldermen and Burgesses of the Borough of Galway", but referred to as "the Corporation".
In the United States, such municipal corporations are established by charters that are granted either directly by a state legislature by means of local legislation, or indirectly under a general municipal corporation law, usually after the proposed charter has passed a referendum vote of the affected population.
Under the enterprise meaning of the term, municipal corporations are "organisations with independent corporate status, managed by an executive board appointed primarily by local government officials, and with majority public ownership". Some MOCs rely on revenue from user fees, distinguishing them from agencies and special districts funded through taxation, although this is not always the case. Municipal corporation follows a process of externalization that requires new skills and orientations from the respective local governments, and follow common changes in the institutional landscape of public services. They are argued to be more efficient than bureaucracy but have higher failure rates because of their legal and managerial autonomy.