Žiri is located in the upper part of the Poljanska Valley and borders three regions: Gorenjska, Notranjska, and Primorska.
Žiri was part of the Loka dominion of the Bishops of Freising for the entire 830 years of its existence.
Its advantageous location helped trade and handicrafts to flourish, and it is therefore no wonder that the town and the surrounding area are famous for their bobbin lace and rich shoemaking tradition.
The architecture of past periods is also very rich. The old school, once the dairy of the Loka dominion, houses a museum, and Žiri and its surrounding boast a rich sacral heritage, including the Church of Sv. Martin which is the largest church in Gorenjska.