Panchayati raj has its origins in India since
Vedic period (1700 BCE). Since Vedic times, the village (gram) in the country is considered as the basic unit for regional self-administration.
Mahatma Gandhi advocated Panchayati Raj as the foundation of India's political system, as a decentralized form of government in which each village would be responsible for its own affairs. The term for such a vision was
Gram Swaraj ("village self-governance"). Instead, India developed a highly centralized form of government. However, this has been moderated by the delegation of several administrative functions to the local level, empowering elected gram panchayats. There are significant differences between the traditional Panchayati Raj system, that was envisioned by Gandhi, and the system formalized in India in 1992.
Jawaharlal Nehru inaugurated Panchayati at
Nagaur on 2 October 1959. The day was selected on the occasion of
Mahatma Gandhi's birthday. Gandhi wanted Gram Swaraj through Panchayati Raj. The Act aims to provide a three-tier system of Panchayati Raj for all states having a population of over two million, to hold Panchayat elections regularly every five years, to provide seats reserved for
scheduled castes,
scheduled tribes and women, to appoint a State Finance Commission to make recommendations regarding the financial powers of the Panchayats, and to constitute a District Planning Committee. ==3 - tier panchayat system==