This is my package hierarchy
app  
|--__init__.py    //Empty file
|--server.py  
|--global_vars.py  
|
|--handlers    
   |--__init__.py    //Empty file
   |         
        If you are running app/server.py as a script, the parent directory of app is not added to sys.path(). The app directory itself is added instead (not as a package but as a import search path).
You have 4 options:
server.py out of the app package (next to it)Add a new script file next to app that only runs:
from app import server
server.main()
Use the -m switch option to run a module as the main entry point:
python -m app.server
Add the parent directory of server.py to sys.path:
import os.path
import sys
parent = os.path.dirname(os.path.dirname(os.path.abspath(__file__)))
sys.path.insert(0, parent)
This last option can introduce more problems however; now both the app package and the modules contained in the app package are on sys.path. You can import both app.server and server and Python will see these as two separate modules, each with their own entry in sys.modules, with separate copies of their globals.
need __init__.py file, will regard it as a package
app
|--server.py
|--global_vars.py
|--handlers
|--__init__.py
...
__init__.py can be empty