Urban-rural coalescence development is a key initiative for reshaping rural-urban relations and achieving Chinese-style modernization. This study analyzes the essence of urban-rural coalescence, provides a comprehensive review of the evolution of China’s rural-urban relations, and highlights the current challenges, including the large income gap between urban and rural areas, obstacles to the flow of resources, incomplete equalization of public services, and weak rural infrastructure. Based on the “National Urban-Rural Coalescence Development Experimental Pilot Zone Reform Plan”, which proposes a new approach of district-level coordination to promote urban-rural integration, this study elaborates on the policy implications and theoretical mechanisms of urban-rural integration through district-wide planning. It also uses the practice of rural-urban integration in the Guang-Qing border area as a case study for analysis. The research shows that district-level coordination, characterized by county-level implementation, breaking administrative boundaries, and cluster-based development, can help alleviate the issue of “integration without cohesion” and facilitate deeper economic and social integration between urban and rural areas. Future priorities for advancing urban-rural integration focus on three main aspects: first, establishing the county-level as the main battlefield for urban-rural integration; second, exploring institutional innovations to break down administrative barriers; and third, strengthening the radiating and driving role of central cities.