Motivated by recent experimental progress in transition metal oxides with the K$_2$NiF$_4$ structure, we investigate the magnetic and orbital ordering in $alpha$-Sr$_2$CrO$_4$. Using first principles calculations, first we derive a three-orbital Hubbard model, which reproduces the {it ab initio} band structure near the Fermi level. The unique reverse splitting of $t_{2g}$ orbitals in $alpha$-Sr$_2$CrO$_4$, with the $3d^2$ electronic configuration for the Cr$^{4+}$ oxidation state, opens up the possibility of orbital ordering in this material. Using real-space Hartree-Fock for multi-orbital systems, we constructed the ground-state phase diagram for the two-dimensional compound $alpha$-Sr$_2$CrO$_4$. We found stable ferromagnetic, antiferromagnetic, antiferro-orbital, and staggered orbital stripe ordering in robust regions of the phase diagram. Furthermore, using the density matrix renormalization group method for two-leg ladders with the realistic hopping parameters of $alpha$-Sr$_2$CrO$_4$, we explore magnetic and orbital ordering for experimentally relevant interaction parameters. Again, we find a clear signature of antiferromagnetic spin ordering along with antiferro-orbital ordering at moderate to large Hubbard interaction strength. We also explore the orbital-resolved density of states with Lanczos, predicting insulating behavior for the compound $alpha$-Sr$_2$CrO$_4$, in agreement with experiments. Finally, an intuitive understanding of the results is provided based on a hierarchy between orbitals, with $d_{xy}$ driving the spin order, while electronic repulsion and the effective one dimensionality of the movement within the $d_{xz}$ and $d_{yz}$ orbitals driving the orbital order.
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