Christaller's Central Place Theory is a geographical theory that explains the size, number, and distribution of human settlements in a hierarchical system. It proposes that central places exist to provide services to surrounding areas, optimizing their locations based on population and distance, thus helping to understand settlement patterns and urban development.
The theory was applied in southern Germany, where it emerged. It has also been used to explain the distribution of cities in Midwest USA, revealing patterns of settlements and market areas.
Influences urban planning by predicting where central places (towns/cities) should be located to provide services efficiently. It affects economic development by guiding the placement of infrastructure and resources.