What is Local Level (Palika)?

A local level — known in Nepali as a palika — is the third and lowest tier of government in Nepal's federal system, sitting beneath the federal (central) government and the seven provincial governments. The 2015 Constitution restructured the country from a centralised unitary state into a federation of three orders of government, and Article 56 lists rural municipalities, municipalities and district assemblies as the institutions of local government. Crucially, the constitution treats local levels not as mere administrative branches of the centre but as a constitutionally recognised order of government in their own right, each with an elected council, its own executive and law-making powers within defined areas.

There are 753 local levels in Nepal, grouped into four types. In ascending order of urban scale these are the rural municipality (gaunpalika), the municipality (nagarpalika), the sub-metropolitan city (upa-mahanagarpalika) and the metropolitan city (mahanagarpalika). As constituted in 2017 the breakdown is 460 rural municipalities, 276 municipalities, 11 sub-metropolitan cities and 6 metropolitan cities, which together make up the 753 total. They sit within the country's 77 districts, which themselves fall under the seven provinces.

Every local level is subdivided into wards, the smallest administrative unit in the country, of which there are 6,743 nationwide. Each ward has its own elected ward chairperson and ward members, giving residents a directly elected representative at neighbourhood scale. The local level is the order of government most citizens interact with day to day — for vital registration (births, deaths, marriages), property and land-ownership certificates, basic schooling and health posts, local roads and drinking water, and a range of certificates, recommendations and small permits.

The four categories of local level are distinguished mainly by population and degree of urbanisation, with thresholds set in the Local Government Operation Act, 2017 and earlier classification decisions. A metropolitan city (mahanagarpalika) is the highest tier, broadly intended for the largest urban centres with populations on the order of 500,000 or more together with substantial infrastructure. Nepal has six: Kathmandu, Pokhara, Lalitpur, Bharatpur, Biratnagar and Birgunj.

A sub-metropolitan city (upa-mahanagarpalika) is the next tier, for large cities of roughly 200,000 people and above. The 11 sub-metropolitan cities are Dharan, Dhangadhi, Itahari, Janakpur, Butwal, Ghorahi, Hetauda, Jitpur-Simara, Kalaiya, Nepalganj and Tulsipur. A municipality (nagarpalika) is an urban local level whose population threshold varies by geography — broadly around 10,000 in the high mountains, rising through the hills and inner Terai to about 75,000 in the Terai plains and 100,000 in the Kathmandu Valley — reflecting how settlement density differs across Nepal's terrain.

A rural municipality (gaunpalika) is the predominantly rural type and is by far the most numerous, covering villages and dispersed settlements across the hills, mountains and plains. The four types differ in classification and in the scale of services and budget they command, but they are constitutionally equal in status: a gaunpalika has the same order of self-government powers as a metropolis. Each type is divided into wards (a local level commonly has between five and dozens of wards depending on size), and the names, numbers and boundaries of all the units were fixed through government notifications issued in 2017.

Each local level has both a legislature and an executive. The legislature is the Village Assembly (in a rural municipality) or Municipal Assembly (in an urban local level), defined by the constitution as the law-making body of the local level. It is composed of all the directly elected representatives — the head and deputy head, every ward chairperson, and the ward members — and it passes local laws, the annual budget and policies within the local level's jurisdiction. The executive is led by an elected head: a mayor (and deputy mayor) in municipalities and cities, or a chairperson (and vice-chairperson) in rural municipalities. Alongside them, additional members are elected to the executive, including women members and members from Dalit or minority communities, a design intended to guarantee representation of historically marginalised groups.

The heads, deputies and ward chairpersons are elected by first-past-the-post voting for five-year terms, while ward members include reserved seats for women and Dalit women, embedding inclusion at the grassroots. This structure makes the local level a genuine miniature government with its own elected legislature, executive and revenue.

The constitution assigns local levels 22 exclusive powers in Schedule 8, plus 15 powers held concurrently with the federal and provincial governments under Schedule 9. The exclusive powers cover, among other things, local taxes (such as property tax, house-rent tax, land-registration fees, business tax and vehicle tax) and service fees; basic and secondary education; basic health and sanitation; local roads, irrigation and drinking water; small hydropower and local electricity distribution; agriculture and livestock extension; cooperatives; local markets; disaster management; protection of local culture and the environment; management of the Village and Municipal Assembly; and local record-keeping including land and house ownership certificates. Local mediation and dispute resolution are also handled through local judicial committees. This combination of own-source revenue and devolved functions gives local levels substantial autonomy, though in practice many depend heavily on fiscal transfers from the federal government.

The current local-level system was created by the Constitution of Nepal, promulgated on 20 September 2015, which abolished the old unitary structure of development regions, zones, districts and Village Development Committees (VDCs) and town municipalities. Before federalism, Nepal had around 3,900 VDCs and roughly 200 municipalities that functioned largely as service-delivery arms of the centre and had gone without elected councils for most of the period after 2002. The federal constitution replaced this fragmented arrangement by amalgamating the old VDCs and municipalities into 753 larger, empowered local units.

The restructuring was carried out in 2016–2017 by a Local Level Restructuring Commission, which recommended the new boundaries; the government then issued notifications fixing the number, names, centres and ward boundaries of all 753 units. The first local elections under the new system were held in three phases in 2017, the first local polls in roughly two decades, bringing tens of thousands of elected representatives into office. A second round of local elections followed in 2022, consolidating the system.

The detailed powers, structures and procedures of local levels are spelt out in the Local Government Operation Act, 2017 (Sthaniya Sarkar Sanchalan Ain), which operationalises the constitutional provisions — defining the functions of the assembly and executive, the role of ward committees, judicial committees, planning and budgeting, and the classification criteria for the four types of local level. Together the 2015 Constitution and the 2017 Act form the legal backbone of Nepal's local government.

Palika is the generic Nepali suffix meaning a municipal or local government body; it appears in gaunpalika (rural municipality), nagarpalika (municipality), upa-mahanagarpalika (sub-metropolitan city) and mahanagarpalika (metropolitan city). In everyday speech 'palika' is often used loosely to mean any local level. A ward (wada) is the sub-unit of a palika, not a separate tier of government; the ward chairperson and ward members are part of the same local level's elected body.

The local level should not be confused with the district. A district (jilla) is an administrative grouping of several local levels, and Nepal has 77 of them. Districts are coordinated by a District Coordination Committee, indirectly elected by the local representatives, which harmonises activities among the local levels of a district and liaises with the provincial and federal governments; the District Assembly is the related body. Importantly, the district is largely a coordinating and administrative layer rather than a fully autonomous government order — the constitution's three governing tiers are federal, provincial and local, with the local level (not the district) being the third tier.

Other points of confusion include the distinction between a municipality (an urban local level) and a metropolitan or sub-metropolitan city, which are simply higher-population categories of urban local level rather than a different kind of institution. The former VDC is also frequently confused with today's rural municipality: VDCs were the pre-2015 village units, and several VDCs were typically merged to form a single new gaunpalika. Finally, 'local level' and 'local government' are used interchangeably for the palika tier, while 'local body' was the older term used for VDCs and municipalities before federalism.