Panchayat and Municipality are the terms for the governing body at the local level. Both exist as a part of the three tier system of the lower, intermediate and upper levels. The 73rd Constitutional Amendment act provided for a Gram Sabha which was the foundation of the Panchayati Raj system. It is essentially a village assembly which consists of all the voters in the area of the panchayat. The state has the power to determine what kind of powers it has to exercise repeatedly, and what functions it has to perform at the village level. The 74th Constitutional Amendment act provides for three types of Municipalities, i.e Nagar Panchayat is for a transitional area between a rural and urban area, municipal Council is for a small urban area and municipal Corporation for a large urban area. Municipalities represent the urban local self-government. Most of the provisions of the two acts are kind of  parallel. It differs only in the fact that they are being applied to either Panchayat or Municipality. Each Gram sabha is the meeting of a specifically particular constituency called ward. Each ward has to have a representative which has been chosen from among the people themselves by the direct election process. The chairperson of the Panchayat or the Municipality at the intermediate and district level are to be elected from among these representatives at the immediately lower level by indirect election