Norwegian municipalities were classified as bykommune (urban municipality) or herredskommune (rural municipality). The distinction was rescinded by The Local Government Act of 1992. The municipalities were ordered by so-called municipality numbers, four-digit codes based on ISO 3166-2:NO which in 1946 were assigned to each municipality. Urban municipalities got a municipality number in which the third digit was a zero.
Between 1960 and 1965 many Norwegian municipalities were merged. For instance when the urban municipality Brevik merged with the urban municipality Porsgrunn and the rural municipality Eidanger, the new municipality was called Porsgrunn and retained its municipality number. As a result, Brevik was considered an urban municipality/town no longer. Cities were formerly categorized as kjøpstad (market town) or ladested small seaport each with special rights. Now the issue is decided by each municipality council and formally accepted by the state. Since 1997 a municipality must have a minimum of 5,000 inhabitants in order to declare city status for one of its settlements. In 1999 the municipality council of Bardu declared city status for Setermoen, only to be rejected because the municipality fell short of the population limit. One exception is Honningsvåg in Nordkapp, where the municipality actually has less than 5,000 inhabitants but declared city status before the limit was implemented by law in 1997.
Because of the new laws, Norway witnessed a rapid rise in the number of cities after 1996. Interestingly, a number of relatively small settlements are now called by, such as Brekstad with 1,828 inhabitants and Kolvereid with 1,448 inhabitants.