on the second level, there are municipalities ("općina", pl. "općine") and cities ("grad", pl. "gradovi"). both of these have one or more settlements ("naselje", pl. "naselja"). the settlements are not legal entities. they are like census designated places in the united states. if they are part of cities or large municipalities, they can form "gradski kotari", "gradske četvrti", or local committee areas ("mjesni odbori"). small municipalities usually have only one settlement.