The Panchayati Raj system refers to local self-government in India, introduced constitutionally in 1992 based on traditional panchayat systems. It formalized decentralized administration with three levels - village, block, and district. Gram panchayats are the basic local administration units. Main functions of block-level committees include general administration, finance, public works, agriculture, health, education, and social welfare. Panchayats receive funds from three sources - local body grants from central commissions, central scheme funds, and state government funds from state commissions.