This article provides a comprehensive legal and economic analysis of the functioning of powiats in Poland. It presents their historical background—from medieval starosties to their contemporary iteration shaped by the administrative reform of 1998—and highlights the importance of powiat as the second tier of local government, responsible for tasks beyond the scope of individual gminas in the social, economic and infrastructural spheres. The author discusses in detail the role of the starosta as the chair of the executive board and public administration body, their powers in the areas of management, issuing administrative decisions, supervising services, inspections and fire service, and representing the powiat externally. This paper also points to the links between the powiat council, the executive board and the central administration, emphasising the importance of the supervision of lawfulness exercised by the voivod and regional chambers of audit. An important element of the analysis is to consider powiats as local “economies” strongly linked to the labour market and the socio-economic environment. The considerations encompass the three dimensions of cohesion: social (based on social capital, integration and solidarity), economic (related to equal access to the labour market, entrepreneurship and the absorption of external funds) and territorial (encompassing infrastructure, communication and public services). The European Union’s cohesion policy and European funds, which strengthen local development, are of particular importance, and the studies on the powiats of Lubelskie Voivodship are a case in point. The conclusions indicate that the effectiveness of the powiat depends on institutional cooperation, strategic planning and the efficient use of resources and EU financial support.