During the British Rule

       The Panchayat had never been the priority of the British rulers.　The rulers were interested in the creation of 'controlled' local bodies, which could help them in their trading interests by collecting taxes for them. When the colonial administration came under severe financial pressure after the 1857 uprising, the remedy sought was decentralisation in terms of transferring responsibility for road and public works to local bodies. However, the thrust of this 'compelled' decentralisation was with respect to municipal administration.
     "The Panchayat was destroyed by the East India Company when it was granted the office of Diwan in 1765 by the Mughal Emperor as part of reparation after his defeat at Buxar. As Diwan the Company took two decisions. The first was that it abolished the village land record office and created a company official called Patwari. The Patwari became the official record keeper for a number of villages. The second was the creation of the office of magistrate and the abolition of village police. The magistrate carried out policing functions through the　Darogha　who had always been a state functionary under the Faujdar. 
 The primary purpose of these measures was the collection of land revenue by fiat. The depredations of the Patwari and the Darogha are part of our folklore and it led to the worst famine in Bengal. The effects of the famine lingered right to the end of the 18th century. These two measures completely disempowered the village community and destroyed the Panchayat. After 1857 the British tried to restore the panchayat by giving it powers to try minor offences and to resolve village disputes. But these measures never restored the lost powers of the village community."
        From 1870 that Viceroy　Lord Mayo's Resolution　(for decentralisation of power to bring about administrative efficiency in meeting people's demand and to add to the finances of colonial regime) gave the needed impetus to the development of local institutions. It was a landmark in the evolution of colonial policy towards local government. The real benchmarking of the government policy on decentralisation can, however, be attributed to Lord Ripon who, in his famous resolution on local self-government on May 18, 1882, recognised the twin considerations of local government: administrative efficiency and Political education. The　Ripon Resolution, which focused on towns, provided for local bodies consisting of a large majority of elected non-official members and presided over by a non-official chairperson. This resolution met with resistance from colonial administrators. The progress of local self-government was tardy with only half-hearted steps taken in setting up municipal bodies. Rural　decentralisation　remained a neglected area of administrative reform.
   The Royal Commission on Decentralisation (1907)　under the chairmanship of　C.E.H. Hob house　recognised the importance of Panchayats at the village level. The commission recommended that "it is most desirable, alike in the interests of decentralisation and in order to associate the people with the local tasks of administration that an attempt should be made to constitute and develop village panchayats for the administration of local village affairs".
       But, the　Montague-Chelmsford reforms　(1919) brought local self-government as a provincial transferred subject, under the domain of Indian ministers in the provinces. Due to organisational and fiscal constraints, the reform was unable to make panchayat institutions truly democratic and vibrant. However, the most significant development of this period was the 'establishment of village panchayats in a number of provinces, that were no longer mere ad hoc judicial tribunal, but representative institutions symbolising the corporate character of the village and having a wide jurisdiction in respect of civic matters' by 1925, eight provinces had passed Panchayat acts and by 1926, six native states had also passed Panchayat laws.
      The provincial autonomy under the Government of India Act, 1935, marked the evolution of Panchayats in　India. Popularly elected　governments　in provinces enacted legislations to further democratise institutions of local self-government. But the system of responsible government at the grassroots level was least responsible. D.P. Mishra, the then minister for local self-government under the Government of India Act of 1935 in Central Provinces was of the view that 'the working of our local bodies... in our province and perhaps in the whole country presents a tragic picture... 'Inefficiency' and 'local body' have become synonymous terms....'
        In spite of various committees such as the　Royal Commission on Decentralization　(1907), the report of Montague and Chelmsford on constitutional reform (1919), the Government of India Resolution (1919), etc., a hierarchical administrative structure based on supervision and control evolved. The administrator became the focal point of rural governance. The British were not concerned with decentralised democracy but were aiming for colonial objectives.
        The Indian National Congress from the 1920s to 1947, emphasized the issue of all-India Swaraj, and organized movements for Independence under the leadership of Mahatma Gandhi. The task of preparing any sort of blueprint for the local level was neglected as a result. There was no consensus among the top leaders regarding the status and role to be assigned to the institution of rural local self-government; rather there were divergent views on the subject. On the one end Gandhi favoured Village Swaraj and strengthening the village Panchayat to the fullest extent and on the other end, Dr. B.R. Ambedkar opposed this idea. He believed that the village represented regressive India, a source of oppression. The model state hence had to build safeguards against such social oppression and the only way it could be done was through the adoption of the parliamentary model of politics.
  During the drafting of the Constitution of India, Panchayati Raj Institutions were placed in the non-justiciable part of the Constitution, the Directive Principles of State Policy, as Article 40. The Article read 'the State shall take steps to organise village Panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government'. However, no worthwhile legislation was enacted either at the national or state level to implement it.
     In the four decades since the adoption of the　Constitution, Panchayat Raj institutions have travelled from the non-justiciable part of the Constitution to one where, through a separate amendment, a whole new status has been added to their history.