To classify administrative regions and implement different management policies accordingly is a common practice adopted in many countries. It is essential for big countries like China to divide different types of administrative regions in line with local conditions to achieve effective national governance. As an important demonstration of administrative divisions, the gradation of administrative regions, especially at the county and municipal levels, has long been an important means in the field of administrative management in China's history. This paper, based on the statistical data of counties and cities in China, used mathematical methods such as AHP and K-means cluster to propose the gradation of counties and cities. And a quantitative assessment of the feasibility and effectiveness of the gradation was conducted. Finally, based on the classification of administrative regions and the gradation of counties and cities, and the legal regulations of administrative divisions, the paper discussed the issue of the procedure and dynamic management of counties and cities' gradation. Results show that, the number of high-gradation counties and cities is relatively large, and the number of low-gradation counties and cities is relatively small. The internal differences of high-gradation counties and cities are larger than those of low-gradation ones. The geographical distribution of different gradations of counties and cities is uneven. It is feasible to classify counties and cities in practice. Thus, it is reasonable to classify counties and cities based on indicators such as population, geography, economy, and management difficulty. One possible method is to classify counties and cities at the provincial level and use proportion instead of absolute value. The goal of counties and cities' classification is to give different jurisdictions to different counties and cities. For the provinces with small difference and small number of counties and cities, they need special arrangements. The significance of the counties and cities' classification is to rationalize the management system of counties and cities and improve the management efficiency. Counties and cities' classification could unleash the vitality of local development and promote healthy competition. And counties and cities' classifications are of great significance for promoting the modernization of the national governance system and governance capacity.