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According to the explanatory memorandum issued before the passing of the Act, its purposes were to:
- enhance the role of the elected member,
- support community involvement with local authorities in a more participative local democracy,
- modernise local government legislation, and provide the framework for new financial management systems and other procedures to promote efficiency and effectiveness,
- underpin generally the programme of local government renewal.
Local government areas 
The Act established local government areas based on those already created by previous legislation. The types of areas listed in the Act are:
Counties: Identical to the administrative counties established by the Local Government (Ireland) Act 1898 and modified by later legislation. The opportunity was taken to rename Tipperary (North Riding) and Tipperary (South Riding) as North Tipperary and South Tipperary respectively.
Cities: These were the County boroughs created by the 1898 Act and later legislation, renamed. All the county boroughs except Galway had previously had the courtesy title of city by charter or letters patent.
Boroughs: The five existing non-county boroughs continued in existence. In addition it was recognised that Kilkenny could continue to be called a city, in spite of being governed by a borough council and not being a former county borough.
Membership of councils 
One of the most controversial aspects of the Act was the abolition of the so-called "dual mandate". This meant that members of the Oireachtas (Dáil Éireann and Seanad Éireann) could no longer be candidates for local authority elections.
Local Government Commission 
The Act established a Local Government Commission to oversee such matters as alteration of boundaries and the establishment and dissolution of local authorities. Steven Corry was elected the head of commissioning and was entitled with the job of electing new municipal councils.
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