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Not only in western countries, but especially in developing countries around the world, urban development consumes a lot of land. Currently, in developing countries, over usage of space typically occurs. In this context, designing with a mixture of land use at higher densities is advantageous in fostering sustainability. For urban designers, achieving urban sustainability has become a primary priority. In this way, this paper presents relevant theories about sustainable development and sustainable urban forms, which provide the background to the idea of compact urban development. The characteristics of compact cities are broken down into high-density development, development of mixed uses, public transit and urban intensification. From an economic, social and environmental viewpoint, the good things of compact cities are checked. In the city planning strategies of several developing countries, the compact concept of city growth is embraced for various advantages. A small agreement on parameters exists because of the complex existence of city systems around the world and dimensions to measure urban compact development. This paper found out different dimensions and relevant indicators to understand compact city development. These indicators and dimensions can be used for assessing urban compactness to make a city more efficient, inclusive and sustainable. Finally, some implementation experiences from developed countries are analysed and some insights are extracted to help in the development of compact cities in Bangladesh.