The Directorate of Rural Development was established in 1983 with the view to have effective supervision, monitoring, and implementation of the schemes of poverty alleviation & other Rural Development Programmes in the Union Territory.

Consequent upon the formulation of the 73rd constitutional amendment and the introduction of the three tier Panchayati Raj set up in this UT, the Directorate of Panchayat was established in 1994 with the view to be the Nodal Department for the Panchayati Raj Institutions for releasing funds and monitoring the implementation of the Planned Schemes by the PRIs.

Subsequently both the Directorates were merged in 2004 and termed as Directorate of Rural Development and Panchayati Raj and since then it has been functioning as one Directorate.

The Directorate of RD & Panchayati Raj has the overall control of nine Community Development Blocks exist in the Rural area of A & N Islands and functioning as nodal department for 70 Gram Panchayats, 07 Panchayat Samities and 02 Zilla Parishads.