Overall balance of excitation and inhibition in cortical networks is central to their functionality and normal operation. Such orchestrated co-evolution of excitation and inhibition is established through convoluted local interactions between neurons, which are organized by specific network connectivity structures and are dynamically controlled by modulating synaptic activities. Therefore, identifying how such structural and physiological factors contribute to establishment of overall balance of excitation and inhibition is crucial in understanding the homeostatic plasticity mechanisms that regulate the balance. We use biologically plausible mathematical models to extensively study the effects of multiple key factors on overall balance of a network. We characterize a network's baseline balanced state by certain functional properties, and demonstrate how variations in physiological and structural parameters of the network deviate this balance and, in particular, result in transitions in spontaneous activity of the network to high-amplitude slow oscillatory regimes. We show that deviations from the reference balanced state can be continuously quantified by measuring the ratio of mean excitatory to mean inhibitory synaptic conductances in the network. Our results suggest that the commonly observed ratio of the number of inhibitory to the number of excitatory neurons in local cortical networks is almost optimal for their stability and excitability. Moreover, the values of inhibitory synaptic decay time constants and density of inhibitory-to-inhibitory network connectivity are critical to overall balance and stability of cortical networks. However, network stability in our results is sufficiently robust against modulations of synaptic quantal conductances, as required by their role in learning and memory. Our study based on extensive bifurcation analyses thus reveal the functional optimality and criticality of structural and physiological parameters in establishing the baseline operating state of local cortical networks.