In 1888 the government, led by the Tory prime minister Lord Salisbury established county councils throughout England and Wales, covering areas known as administrative counties. Many larger towns and cities were given the status of county borough, with similar powers and independent of county council control. Under the Act, each county borough was an "administrative county of itself".
Additionally there was a County of London which covered the area today known as Inner London. The Isle of Wight was previously administered as part of Hampshire but became its own administrative county in 1890.
In 1894 a uniform two-tier system was established outside the county boroughs and London, with subdivisions of the administrative counties called urban districts, rural districts and municipal boroughs. The structure was complete once the County of London was divided into metropolitan boroughs in 1900.
Most exclaves of counties were eliminated under the Counties (Detached Parts) Act 1844, but in 1894 county councils were given the power to adjust county boundaries, and most of the remaining anomalies were removed in the next few years. For example, the Measham area of Derbyshire was transferred to Leicestershire in 1897.