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Instability is an omnipresent process that creates the conditions for adaptation and change. A territorial system cannot develop without instability. A high degree of system instability points out an acute structural and functional disorder. The present study proposes a method to measure system instability through economic structural and functional changes inside urban territorial systems. The analysis is done by quantifying the changes and transfers in internal economic hierarchies. System instability shows the role that the system plays in its environment and consequently the measures that can be taken to amplify or hinder (depending on the desired outcome) that role. The conceptual framework captures the adaptive processes associated with system instability and both structural and functional changes are evidenced. The non-linear processes were analysed for the urban territorial system of Baia Mare (Romania) underlining their role in the city's adaptation to the changing of its environment. The proposed method starts from the assumption that internal systemic hierarchy is a very stable parameter of state. If the system is unstable, significant changes of the internal hierarchy will happen, and this will be reflected in a strong structural and functional shift. Measuring system instability helps better understanding the impact that change and adaptation have over the territorial system and its environment. Understanding these processes may offer policy makers the evidence they need to take actions in a conscious manner.