Abstract: As a key policy tool for the management and control of territorial spatial planning, the urban development boundary lacks corresponding research and deepening of the judgment of its public policy attributes. As a result, the policy concept is not clear and the policy practice is in a dilemma. Based on the perspective of public policy, the S-CAD approach is chosen to divide policy tools into ‘value-objectives-means-results’. This article introduces the elements of ‘institutional management’ and divides them into three elements:‘value objectives-control means-institutional management’. Combined with development paths, it is divided into three major elements:balancing development and protection, matching supply and demand, and combining rigidity and flexibility, in order to discuss the internal mechanism of the delineation and management of urban development boundaries in China. Secondly, the urban development boundary is more policy-oriented in small towns. Taking the practice of delimiting the urban development boundary in Taicang in Jiangsu Province as an example, the technical thinking of the three elements of ‘value target-control means-system management’ is proposed. In terms of value target, adhere to the limitation of protection principle, balance the relationship between development and protection. In terms of control technology, coordinate the supply and demand relationship between the spatial structure and the total construction volume through adjustment and optimization of construction land. In terms of institutional management, faced with the uncertainty of urban development, rigid control and stable protection of the area, flexible pre-control all kinds of development space, to achieve short-term and long-term development goals. Finally, relevant recommendations are formulated for the delineation and management of urban development boundaries of small towns in China.