Township economy is an important part of regional economy and its development has its own characteristics. This article takes 16 townships in Yanshi city of Henan province as samples, selects 14 indicators, applies principal component analysis and factor analysis method to make empirical study, extracts comprehensive economic strength factor, agricultural development strength factor, tertiary industry development strength factor and industrial development strength factor as main factors, then makes cluster analysis based on main factors' score matrix of the 16 townships. The results indicate that agriculture is the subject of township economy development; at the same time, the function of tertiary...