This article is concerned with defining and characterizing hierarchical structures in smooth dynamical systems. We define transitions between levels in a dynamical hierarchy by smooth projective maps from a phase space on a lower level, with high dimensionality, to a phase space on a higher level, with lower dimensionality. It is required that each level describe a self-contained deterministic dynamical system. We show that a necessary and sufficient condition for a projective map to be a transition between levels in the hierarchy is that the kernel of the differential of the map is tangent to an invariant manifold with respect to the flow. The implications of this condition are discussed in detail. We demonstrate two different causal dependences between degrees of freedom, and how these relations are revealed when the dynamical system is transformed into global Jordan form. Finally these results are used to define functional components on different levels, interaction networks, and dynamical hierarchies.