The renormalization in real space of systems with nonlocal degrees of
freedom is discussed and reviewed for the percolation model, for which
the degrees of freedom, the clusters, are nonlocal and span all range
s in the system. Previous attempts, including recent ones, are critica
lly examined and shown to lack a theoretical basis; in particular, the
y do not consider the partition function. It is demonstrated that, in
contrast to the case of local degrees of freedom, all ranges of the de
grees of freedom must be considered when eliminating nonlocal degrees
of freedom at short distances. New couplings are naturally generated,
and lead to a mapping between clusters in the original and renormalize
d systems, and thus to the renormalization group equations. Remaining
questions are discussed.