Body size varies across 21 orders of magnitudes in the animal kingdom [1]. In contrast to most organs, which scale through the proliferation of dividing cells of similar size, brains expand by modulating the size of non-dividing neuronal cells to innervate space during development [2]. Consequently, there is a notable variation in neuronal size and structure within individual brains and across species [3]. Considering that size inherently affects the rates of biological structures and processes, from cellular metabolism to information processing [4], the ability of neurons to maintain essential computational functions despite size variation poses a significant and unresolved question in neuroscience [5]. Recent theoretical studies have shown that for a given dendritic synaptic density neuronal firing rates remain stable across a wide range of dendritic morphologies, regardless of branching pattern, size, or synaptic spatial distribution on dendritic trees, providing a putative functional homeostatic mechanism across species and scales [6]. Here, aiming to understand the activity-dependent and -independent developmental mechanisms that establish and modulate dendritic synaptic density, we employed data analysis and modelling, along with electron microscopy (EM) datasets from mutant flies, carrying genetic interventions that shifted neuron locations (FraRobo) or silenced their activity (TNT, Fig. 1A-B) [7]. We found that in mutants with shifted neuron location, the number of synapses per connection correlates with spatial proximity, even though these synapses form at a similar density and size compared to wild-type (Fig. 1C). On the other hand, in mutants where synaptic transmission was blocked, we observed paradoxical effects. While compensatory mechanisms triggered an increase in connection strength, measured by the number of synapses, these newly formed synapses were smaller than wild-type, potentially limiting the effectiveness of this compensation (Fig. 1D). We then developed computational models integrating local resource competition during synaptogenesis and subject to constraints imposed by network activity homeostasis, which recapitulated the observed regulation of synapse size and strength. Taken together, our findings highlight that synaptic density regulation is key for network activity homeostasis, and it is modulated by partner positioning and neuronal firing during development.