They replaced the earlier system of urban and rural sanitary districts (based on poor law unions) the functions of which were taken over by the district councils. The district councils also had wider powers over local matters such as parks, cemeteries and local planning. An urban district usually contained a single parish, while a rural district might contain many. Urban districts were considered to have more problems with public health than rural areas, and so urban district councils had more funding and greater powers than comparable rural districts.
Urban districts normally covered smaller towns, usually with populations of less than 30,000. Originally there had been 1009 urban districts but implementation of the recommendations of a series of county reviews as established by the Local Government Act 1929 saw a net decrease of 159 in the number of urban districts between 1932 and 1938. In many instances smaller urban districts were merged with their surrounding rural districts, with the result that new districts emerged covering rural as well as urban parishes. At the same time, a number of larger urban districts became municipal boroughs (as already created, in 1835 under the Municipal Reform Act 1835): these had a slightly higher status and the right to appoint a mayor.
All urban districts in England and Wales were abolished in 1974 by the Local Government Act 1972, and replaced with a uniform system of larger districts – see Districts of England and Districts of Wales – which often covered both urban and rural areas. Many parish councils in England were created for towns previously covered by urban districts and, as a result of subsequent legislation, all urban and rural areas in Wales are today covered by 870 communities as sub-entities of 22 unitary authorities (or principal areas).
In Ireland urban districts were created in 1898 by the Local Government (Ireland) Act 1898 based on the urban sanitary districts created by the Public Health (Ireland) Act 1878, and the suburban townships adjacent to Dublin city. Urban districts had powers greater than towns with town commissioners but less than the municipal boroughs preserved by the Municipal Corporations (Ireland) Act 1840 or created subsequently. A few places were promoted or demoted between these three categories in subsequent decades.
After the partition of Ireland in 1920–22 urban districts continued in both the Irish Free State (now the Republic of Ireland) and Northern Ireland. The rural and urban districts in Northern Ireland were abolished in 1973, and replaced with a system of unitary districts. In the Republic, while rural districts were abolished in 1925 and 1930, urban districts continued to exist but were renamed simply 'towns' under the Local Government Act 2001.