It is a longstanding political center, and is located at approximately equal distances from the Southern Carpathians (north) and the River Danube (south). Craiova is the chief commercial city west of Bucharest and the most important city of Oltenia. The city prospered as a regional trading centre despite an earthquake in 1790, a plague in 1795, and a Turkish assault in 1802 during which it was burned.

Eight villages are administered by the city: Făcăi, Mofleni, Popoveni, Șimnicu de Jos, Cernele, Cernelele de Sus, Izvoru Rece and Rovine. The last four were a separate commune called Cernele until 1996, when they were merged into the city.