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Historians have described the history of governments and empires in terms of centralization and decentralization. In his 1910 The History of Nations Henry Cabot Lodge wrote that Persian king Darius I (550–486 BC) was a master of organization and "for the first time in history centralization becomes a political fact."
The main concept of decentralization is that many problems and matters are better solved at the local level. Additionally, at the local level, people can directly participate in making decisions. This promotes democratic participation and encourages people to get involved. In 1992, a significant step was taken towards decentralization.
The Government of India Act 1858 (21 & 22 Vict. c. 106) was an act of the Parliament of the United Kingdom passed on 2 August 1858. Its provisions called for the liquidation of the East India Company (who had up to this point been ruling British India under the auspices of Parliament) and the transferral of its functions to the British Crown.
The committee recommended the establishment of the scheme of ‘democratic decentralization’, which finally came to be known as Panchayati Raj. This led to the establishment of a three-tier Panchayati Raj system: Gram Panchayat at the village level, Panchayat Samiti at the block level, and Zila Parishad at the district level.
The economic liberalisation in India refers to the series of policy changes aimed at opening up the country's economy to the world, with the objective of making it more market-oriented and consumption-driven. The goal was to expand the role of private and foreign investment, which was seen as a means of achieving economic growth and development.
However, this 'compelled' decentralization primarily focused on municipal administration. The panchayat was dismantled by the East India Company when it was granted the office of Diwan in 1765 in Bengal by the nawab, as part of reparation following his defeat at Buxar. As Diwan, the Company made two key decisions.
The early history of British expansion in India was characterised by the co-existence of two approaches towards the existing princely states. [7] The first was a policy of annexation, where the British sought to forcibly absorb the Indian princely states into the provinces which constituted their Empire in India.
This is a timeline of Indian history, comprising important legal and territorial changes and political events in India and its predecessor states. To read about the background to these events, see History of India. Also see the list of governors-general of India, list of prime ministers of India and list of years in India.