Tamil Nadu is the first State to have introduced a classification in the status of local bodies as Town Panchayat, which was planned as a transitional body between Rural and Urban Local Bodies.

The Town Panchayats were conferred with individual administrative powers and unique functional characters have been in existence for over a century. The Town Panchayats  adopt well devised accounting and auditing procedures and the service delivery to the public has been better.
Town Panchayats are under the administrative control Municipal Administration and Water Supply Department, at Govt. level.

The Town Panchayats are places of importance such as Division / Taluk headquarters, Tourist Spots, Pilgrim Centers and Commercial/Industrial towns. This has necessitated special attention to the civic needs of the Town Panchayats.