This paper is intended to theoretically examine the premises of the regional development paradigm. It discusses key conceptual categories and the logical structure of the idea to highlight comparative differences between the traditional and territorial understanding of space and its impact on economic development. Further considerations focus on the interpretation of derivative notions such as territorial capital, territorialisation of economic development, and development policy. The applied research method consists of a critical analysis of the literature on the subject, supplemented with an analysis of reports and expert opinions prepared for the Organisation for Economic Co-operation and Development (OECD) and the European Commission. Recent decades have witnessed an in-depth reinterpretation of the meaning of space in economic development processes. The term “territory” is no longer identified with a static location and a simple accumulation of resources. It is interpreted as a place that is dynamic in terms of time and space and that has emerged from interactions and network relationships with its own informal institutions and specific resources, which facilitate the attainment of improved economic efficiency. It is also perceived as a dynamic organisational structure that reduces uncertainty and risk and as a place where resources are generated and accumulated, and within which knowledge, innovation, and skills are transferred. Place-based development produces a specific system of relationships and a creative social and economic framework that can be adapted to changes by creating new resources and development opportunities.