Designated cities are delegated many of the functions normally performed by prefectural governments in fields such as public education, social welfare, sanitation, business licensing and urban planning. The city government is generally delegated the various minor administrative functions in each area, and the prefectural government retains authority over major decisions. For instance, pharmaceutical retailers and small clinics can be licensed by designated city governments, but pharmacies and hospitals are licensed by prefectural governments.
Designated cities are also required to subdivide themselves into wards (区 ku) (broadly equivalent to the Boroughs of London or the Boroughs of New York City), each of which has a ward office conducting various administrative functions for the city government, such as koseki and juminhyo resident registration and tax collection. In some cities, ward offices are responsible for business licensing, construction permits and other administrative matters. The structure and the authorities of the wards are determined by municipal ordinances.
The 23 special wards of Tokyo are not part of this system, as Tokyo is a prefecture, and its wards are effectively independent cities. Although the two largest wards of Tokyo, Setagaya and Nerima, are populous enough to become designated cities, they are not considered to be "cities" within the meaning of the Local Autonomy Law and so are not designated such.
No cities designated by government ordinance have ever lost that status.