The panchayats and village headmen played a crucial role in regulating rural society through various mechanisms.

The village panchayat was an assembly of elders with hereditary rights over their property. In mixed-caste villages, it was a heterogeneous body representing various castes and communities, though menial-cum-agricultural workers were usually not represented. The panchayat was headed by a headman called muqaddam or mandal, who was chosen through the consensus of village elders and ratified by the zamindar. The headman held office as long as he enjoyed the confidence of village elders and could be dismissed otherwise.

The chief function of the headman was to supervise the preparation of village accounts, assisted by the accountant or patwari. The panchayat had the authority to levy fines and inflict punishments like expulsion from the community. This drastic measure meant a person became an outcaste and lost the right to practise his profession, serving as a deterrent to violation of caste norms.

Each jati panchayat wielded considerable power in rural society. In Rajasthan, they arbitrated civil disputes between members of different castes, mediated in contested claims on land, decided whether marriages were performed according to caste norms, and determined ritual precedence in village functions. The state generally respected the decisions of jati panchayats except in matters of criminal justice.

An important function of the panchayat was to ensure that caste boundaries among various communities were upheld. In eastern India, all marriages were held in the presence of the mandal. The panchayat also mediated conflicts between lower-caste peasants and state officials or zamindars, suggesting compromise in cases of excessive revenue demands.