In the past few years, the process of urban design has been criticized for its definitions, ideas, steps, and interactions with other fields. Local governments' plans for urban development often don't turn out the way people thought they would. This literature review study tried to figure out how the development of a city's identity is affected by the process of redesigning the city. Different studies from reputable journals and online data bases were looked at to find out how urban planning and urban design relate to each other and how this affects the process of re-designing a city or place for the development of the identity of a Local Government Regional Unit, with Kozani, Greece as a case study. The study found that the connection between urban planning and urban design is often misunderstood and seen as unclear. Even though urban design was made to connect urban planning and architecture, there may still be a gap between the two, especially on a theoretical level. From a practical point of view, the study wants to look into the criticisms that have been made about the theoretical goals of urban planning. It fills in the theoretical gap in the field of urban design, both in the process and in relation to urban planning. It looks at why such criticisms are made and what can be done to close the theoretical gap in urban planning.