The approach of Smart City is getting more and more important for both academics and policy makers. Despite this, there is still confusion on what a Smart City is and several similar terms are often used interchangeably. This paper aims at clarifying the meaning of the word “smart” in the context of cities development and to identify the main dimensions and elements characterizing a smart city. Furthermore, performance measures of a smart city will be identified. The aim of the article is to analyze and evaluate the degree of implementation of the Smart City concept in selected cities in Poland. The article will also cover the use of information and communication technologies (ICT) to improve selected areas of the city. The article also analyses the main barriers that make it difficult to invest in Smart City. In the following publication, the main research method was a questionnaire, which was sent to the 57 cities-capitals of the Lublin and Mazovian Voivodships. The paper also presents the prospects for the development of Smart City initiative in Poland. The research has shown that the level of implementation of Smart City Initiative is low. The main barrier to such investment is the lack of adequate funds and insufficient human resources and knowledge.