We discuss the averaging hypothesis tacitly assumed in standard cosmology. Our approach is implemented in a "3+1" formalism and invokes the coarse graining arguments, provided and supported by the real-space Renormalization Group (RG) methods. Block variables are introduced and the recursion relations written down explicitly enabling us to characterize the corresponding RG flow. To leading order, the RG flow is provided by the Ricci-Hamilton equations studied in connection with the geometry of three-manifolds. The properties of the Ricci-Hamilton flow make it possible to study a critical behaviour of cosmological models. This criticality is discussed and it is argued that it may be related to the formation of sheet-like structures in the universe. We provide an explicit expression for the renormalized Hubble constant and for the scale dependence of the matter distribution. It is shown that the Hubble constant is affected by non-trivial scale dependent shear terms, while the spatial anisotropy of the metric influences significantly the scale-dependence of the matter distribution.

57 pages, LaTeX, 15 pictures available on request from the Authors