A new theoretical framework is used to analyze functions and pathophysiological processes of cortico-basal ganglia-thalamocortical loops and to demonstrate the hierarchical relationships between various loops. All hierarchical levels are built according to the same functional principle: Each loop is a neural optimal control system (NOCS) and includes a model of object behavior and an error distribution system. The latter includes dopaminergic neurons and is necessary to tune the model to a controlled object (CO). The regularities of pathophysiological processes in NOCSs are analyzed. Mechanisms of current functional neurosurgical procedures like lesioning and deep brain stimulation (DBS) of various basal ganglia structures and neurotransplantation are described based on proposed theoretical ideas. Parkinson's disease (PD) is used to exemplify clinical applications of the proposed theory. Within the proposed theoretical framework, PD must be considered as a disease of the error distribution system. The proposed theoretical views have broad fundamental and clinical applications.