The present paper discusses the process of linguistic borrowing and adaptation of foreign words to the rules of Croatian. The process is analysed on the examples of borrowings from English. Earlier studies of this process and linguistic changes in general are critically analysed within the context of the theory of radial categories and concepts of encyclopedic knowledge (whose methodological apparatus provides a detailed description of the course and logic of linguistic borrowing). A new model for the analysis of linguistic borrowing is proposed. This model, on the one hand, integrates the results of earlier studies of this phenomenon and presents them in the light of their mutual interdependence, and on the other hand, offers an integral insight into the nature and course of linguistic borrowing. Earlier attempts studied only individual aspects of linguistic borrowing and did not provide a complete insight into the whole process. On the basis of the proposed model some general conclusions about the nature of two basic approaches to interrelations of lexic and norm (puristic and functional), as well as some principles of lexical normativity can be made, if we abandon somewhat paradoxical notion of lexical norm due to the direct interdependence of linguistic borrowing and extralinguistic reality.