Abstract In political structure, there is a government in India at the Center and State levels. There is another important system for local governance. Panchayati Raj system signifies the system of rural local government and Municipalities signifies for governance of urban area. The foundation of the present local self-government in India was laid by the Seventy third and Seventy Fourth Constitutional Amendment Act (1992). But the history of Panchayati Raj starts from the self-sufficient and self-governing village communities. In the time of the Rig-Veda (1700 BC), evidence suggests that self-governing village bodies called ‘sabhas’ existed. With the passage of time, these bodies became panchayats (council of five persons). Panchayats were functional institutions of grassroots governance in almost every village. This system went through several high and low during colonial era and again getting centre stage during freedom struggle. Mahatma Gandhi, Decentralisation and Women were three important pillars strengthening foundation of local government in its making.