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The paper discusses territory planning and land reform during the period of the independence of Lithuania since 1990. With the beginning of unplanned land restitution private land parcels were formed chaotically. These parcels were not adapted to any developement prospects except farming. So proper planning of these parcels meant a new period of territory planning. An unproper legal system regulating private and state interests in territory planning resulted in such negative processes as fragmentation of farming lands, urban sprawl, unjustified expansion of urban lands. According to this situation, land reallocation principles are suggested that can help to combine private and state interests in the territory planning process.