Explanation:

The establishment of Panchayats at the grassroots level as part of the Panchayati Raj system in India can be explained as an exercise to promote: Participatory Democracy : Panchayats encourage the active participation of local residents in the decision-making process. By involving ordinary citizens in discussions and decisions about local issues, it fosters a sense of ownership, accountability, and responsiveness in governance. Overall, the establishment of Panchayats at the grassroots level is a fundamental step towards strengthening local governance, promoting citizen engagement, and achieving sustainable and inclusive development. Hence, option 1 is correct. Decentralisation: Panchayats represent a form of decentralised governance where decisionmaking authority is devolved from higher levels of government to the local level. This promotes the distribution of power and resources, allowing communities to have more control over their own development. Hence, option 2 is incorrect. Reference: N