A direct connection between democracy, the rule of law and the position of archives in state and society is generally assumed. The development of the Hungarian territorial and municipal archives suggests a more complex relationship. In 1950, local and county archives were declared to be state bodies and merged into territorial state archives. This centralisation resulted in territorial archives in each county becoming ‘backbone’ institutions with considerable levels of archival professionalisation. The reform of state socialism in the 1960s introduced decentralisation. Territorial archives became subordinate to the councils of the counties and the capital city in 1968. The new parent organisations encouraged the exploration of local identity and the popularisation of local and regional history. County archives became workshops of history, a process underpinned by growing archival professionalism. After the fall of the communist regime (1989/90) the compensation of individuals and families, killed, imprisoned, persecuted between 1939 and 1989 and of those whose properties were confiscated by the state presented territorial archives with enormous challenges. It also led to unprecedented mass use of archives and the raising of new issues: could the archives exploit the new possibilities and become a resource for citizens? Recent reductions in funding and the reorganisation of public services have led to renewed centralisation: county archives were affiliated to the National Archives in 2012, with the exception of Budapest and four other local archives. The article focuses on the implications of these developments: can the county archives retain their role in defining local identity? Can they play active roles in cross-border cooperation? What new opportunities arise?