Urban autonomy has a long history back to the prehistoric urbanization and the original Mediterranean city-states of classical times, e.g. Ancient Athens, Ancient Rome. In medieval times such measures as the Magdeburg rights established special status for cities and their residents in commercial relations. In general it receded as European cities were incorporated in nation-states especially in the 17th century to 20th century, eventually losing many special rights.
Examples of formally or effectively seceded urban regions include Singapore, Hong Kong before 1997, Washington DC (set up initially as separate from any state), and to a degree the power wielded by the Greater London Council in the UK before its abolition by Margaret Thatcher. In Germany there are three city-states, and in France Paris is its own département. North America is an exception in that only national capitals have this status, and that typically due to acts of fiat by their federal governments. Some cities, e.g. New York City, have some powers normally associated with states, e.g. to levy income tax. The "region" or "greater metropolitan area" of some cities has legal standing in some states or countries. In the United States, so do cities proper. Most cities in the US are part of a county; there are exceptions, cities that are not part of any county, including Baltimore, St. Louis, and all municipalities in Virginia that are incorporated as cities. In Canada, cities are entirely ruled by provinces.
Not surprisingly the theory of urban secession is especially well developed in Canada, due to both cities' very limited powers, and the example of some Northeast U.S. cities rendered powerless by state or suburban initiatives, e.g. Detroit, Philadelphia, New York City, in the 1960s, and the resulting poverty and distress of the downtown cores. Toronto and Montreal avoided this fate at that time, but in the 1990s began to experience many of the same problems, at about the same population as Detroit or Philadelphia at the time of their decline. Secession is of course only one of many possible solutions, but one that is considered politically useful in Canada due to the constant threat of Quebec secession from Canada.
However, urban secession movements, e.g. the Province of Toronto are more than bargaining tactics. There is a robust theory of why a city should be at least partially independent of surrounding regions, going back to Classical Rome, 17th-century London, 18th-century Amsterdam and other centers of commercial activity. Comparisons focused on the modern nation-state and its relationships to the more traditional feudal city-state government.
Modern theorists of local civic economies, including Robert J. Oakerson and Jane Jacobs, argue that cities reflect a clash of values, especially of tolerances versus preferences, with views of the city varying from a pure community to that of a pure marketplace. Suburbanites have a strong tendency to view the city as a marketplace since they do not participate in its street life voluntarily, nor do they consider the city to be a safe and comfortable place to live in. By contrast, those who choose downtown living tend to see it as more of a community, but must pay careful attention to their tolerances (for smog, noise pollution, crime, taxation and etc.). Ethics and thus politics of these interest groups vastly differ.
Secession (the setup of entirely new legislative and executive entities) is advocated by certain urban theorists, notably Jane Jacobs, as the only way to deal politically with these vast differences in culture between modern cities and even their nearest suburbs and essential watersheds. As she says: "Cities that wish to thrive in the next century must separate politically from their surrounding regions." She rejects the lesser "Charter" and less formal solutions, arguing the full structure of real regional government is necessary, and applied to the urban area alone. In particular she rejects the idea that suburban regions should have any say over the rules in the city: they have left it, and aren't part of it. Jacobs herself lives in an urban neighborhood (The Annex, Toronto) which would have been obliterated in the 1970s by a highway project to serve the suburbs, the Spadina Expressway, had she and her allies not stopped it. Jacobs likewise stopped the development of the Cross-Manhattan Expressway in the 1960s, opposing Robert Moses. These freeways are examples of the clash of urban community versus suburban market interests. In these two cases, 'community' won, but the deciding factor in both was most likely Jacobs herself.
Advocates of highway development and suburban participation in urban government theorize that cities which protect themselves from the suburbs, forcing them to become self-sufficient small towns, cutting off the freeways, forcing commuterss into subways, etc., are committing suicide by forcing business out into the suburbs. Advocates respond that cities depend more on their quality of life to attract migrants and professionals, and that telecommuting makes it possible for workers in the city to live anywhere, coming into town less frequently, without the rush.