The aim of this final paper is a systematic analysis of legal norms and legal theory that refers to the position and powers of agencies in the Republic of Croatia as organizations structurally separated from the state administration system, and formally separated from ministries. The questionable position and authority of the agencies was primarily influenced by the ill-conceived inclusion of the agency model in the existing configuration of the public sector, as well as the absence of a singular legislative regulation that would prevent diversity and institutional, organizational and functional inconsistency. In that sense, the text minutely analyses the system of agencies with regard to the unregulated legal framework and criteria for their establishment and determination of legal personality, the imbalance between independence and responsibility, and the unevenness of the funding system and salary system. Considering that agencies are established in all areas (mostly in the economy) and that they mainly perform regulatory and/or executive functions, the analysis delves deeply into both executive and regulatory agencies. Executive agencies perform executive tasks, while regulatory agencies regulate and monitor behaviour in a certain sector. The text also discusses the relationship and demarcation between agencies and ministries as completely opposite organizational forms, as well as the demarcation between agencies and institutions. Special emphasis is placed on the waves of reforms over the agency system, and especially the latest reforms of the entire public administration system. The results of the analysis indicate an inefficient system of agencies in the Republic of Croatia, based on an unregulated and uneven system of rules, and the need to conduct research and radical changes in this area, which is referred to in the concluding part of the diploma paper with a reasoned explanation.