One of the issues that urban system of many developing countries are facing, is the formation of new towns from rural settlements. In the Guilan Province of Iran, as an important agricultural region, the problem of this reclassification, has received considerable attention, because of the possible destruction of agricultural land. The question that which factors and processes force to rural settlements be identified and reclassified as a city can be considered as the most important question in relation to this subject. This research employs a qualitative approach focusing on the application of grounded theory in order to explain the nature of this subject. For this aim, 15 experts were selected by snowball-sampling method and interviewed. The research findings show that the political factor has been the main factor affecting the reclassification of rural settlements into cities in this region. This has occurred through five key components, including intervention by political power, redefining space management scale by government, people's attitudes about cities and villages, ignoring key capacities of settlements and dependence of rural settlements on governmental economic resources and subsidies. Meanwhile, the role of the authorities has been the most effective role in reclassification of rural settlements into cities since 1991. Due to this, the process of formation of new urban centers and reclassification of rural settlements into cities in Guilan province, can be defined as an inter-related top-down/bottom-up process. In this process, firstly, the demand of local people and political-social elites, leads to intervention for reclassification of rural settlements as city. Through this, willing and pursuit of people for reclassification of rural settlements into cities because of cultural attitudes or better life conditions, has been considered as bottom-up intervention, and the legal means (instruments) such as laws and approval by the state is considered as top-down intervention.