With the eighteenth century began a new era in the history of the towns and of the urban population.  Peter the Great observed, during his travels in Western Europe, that national wealth and prosperity reposed chiefly on the enterprising, educated middle classes, and he attributed the poverty of his own country to the absence of this burgher element.  Might not such a class be created in Russia?  Peter unhesitatingly assumed that it might, and set himself at once to create it in a simple, straightforward way.  Foreign artisans were imported into his dominions and foreign merchants were invited to trade with his subjects; young Russians were sent abroad to learn the useful arts; efforts were made to disseminate practical knowledge by the translation of foreign books and the foundation of schools; all kinds of trade were encouraged, and various industrial enterprises were organised.  At the same time the administration of the towns was thoroughly reorganised after the model of the ancient free-towns of Germany.  In place of the old organisation, which was a slightly modified form of the rural Commune, they received German municipal institutions, with burgomasters, town councils, courts of justice, guilds for the merchants, trade corporations (tsekhi) for the artisans, and an endless list of instructions regarding the development of trade and industry, the building of hospitals, sanitary precautions, the founding of schools, the dispensation of justice, the organisation of the police, and similar matters.

Catherine II. followed in the same track.  If she did less for trade and industry, she did more in the way of legislating and writing grandiloquent manifestoes.  In the course of her historical studies she had learned, as she proclaims in one of her manifestoes, that “from remotest antiquity we everywhere find the memory of town-builders elevated to the same level as the memory of legislators, and we see that heroes, famous for their victories, hoped by town-building to give immortality to their names.”  As the securing of immortality for her own name was her chief aim in life, she acted in accordance with historical precedent, and created 216 towns in the short space of twenty-three years.  This seems a great work, but it did not satisfy her ambition.  She was not only a student of history, but was at the same time a warm admirer of the fashionable political philosophy of her time.  That philosophy paid much attention to the tiers-etat, which was then acquiring in France great political importance, and Catherine thought that as she had created a Noblesse on the French model, she might also create a bourgeoisie.  For this purpose she modified the municipal organisation created by her great predecessor, and granted to all the towns an Imperial Charter.  This charter remained without essential modification until the publication of the new Municipality Law in 1870.