As part of the price for this support the Liberal Unionists demanded that a bill be introduced placing county government under the control of elected councils, modelled on the borough councils introduced by the Municipal Corporations Act 1835.

The bill proposed the creation of elected county councils to take over the administrative functions of the magistrates of the Quarter Sessions courts, that ten large cities should be "counties of themselves" for the purposes of local government and that each county was to be divided into urban and rural districts, based on existing sanitary districts, governed by a district council.

A county council was to be formed for each of the ridings of Yorkshire and the three divisions of Lincolnshire (Holland, Kesteven and Lindsey).

The 10 cities first identified to be dealt with as separate counties were Liverpool, Birmingham, Manchester, Leeds, Sheffield, Bristol, Bradford, Nottingham, Kingston-on-Hull, and Newcastle upon Tyne.

Members of both houses made representations on behalf of counties and boroughs, and this led to an increase in the number of local authorities.

Attempts to create administrative counties for the Cinque Ports and Staffordshire Potteries were not successful.

With a population of around 50,000 at the 1881 census, the City of London was initially proposed for county borough status.

As to natural persons section 1 of the act states every such council shall "consist of the chairman, aldermen, and councillors".

[12] The Chairman would upon (this ex officio, by virtue of office) the selecting of that person (co-option) be entitled to be a Justice of the Peace but needed take the oaths of that office "before acting as such justice",[13] aside from the oath as to having local real estate as they had already met the equivalent requirement to become a councillor or alderman.

[20] Whilst schedule 3 of the act identified that four of the county boroughs (Bristol, Great Yarmouth, Stockport and York) should be deemed to lie in more than one county for the purposes of the act, those purposes did not include lieutenancy, but were instead concerned with certain financial matters.

Section 49 allowed for the creation by provisional order of a Council for the Scilly Islands to be established as a unitary authority outside the administrative county of Cornwall.

There were 37 urban sanitary districts which straddled counties prior to the act coming into force.

[27] The Metropolitan Board of Works district, covering the urban area of London, also straddled counties prior to 1889, including parts of Middlesex, Surrey and Kent.

It was not classed as an urban sanitary district, and was dealt with separately under the act by being made the new County of London.