Since the enactment of Act Number 22 of 1999 on Local Government (the law was revised by Act Number 32 of 2004), local governments now play a greater role in administering their areas. Foreign policy, defence (including armed forces and national police), system of law, and monetary policy, however, remain the domain of the national government. Since 2005, heads of local government (governors, regents and mayors) have been directly elected by popular election.
A province is headed by a governor (Gubernur). Each province has its own regional assembly, called Dewan Perwakilan Rakyat Daerah (DPRD, literally "Regional People's Representative Assembly"). Governors and representative members are elected by popular vote for five-year terms.
Indonesia is divided into 34 provinces. Eight provinces have been created since 2000. Five provinces have special status:
- Aceh: Aceh has greater role in local government, which includes its own Islamic Sharia law (for Muslim citizens), flag and provincial anthem, local political parties are allowed, and decisions or laws made by the central government which directly affect Aceh's administration must be referred to the local government or legislative body.
- Yogyakarta Special Region: The Sultan of Yogyakarta is de facto and de jure governor of Yogyakarta since he is given priority when electing the governor. For centuries, the Sultanate of Yogyakarta has reigned in the region. However, in the 2000s the central government proposed a law that required the governor to be popularly elected as in the other provinces, while still giving the sultan significant political power. Since 31 August 2012, the Act No. 13 of 2012 on Specialty of Yogyakarta Special Region has been approved by the central government and according to the act, Yogyakarta refuses to be a province but a region at province-level. Within the Special Region of Yogyakarta is also the Principality of Pakualaman. The Prince of Pakualaman is also a hereditary position, and serve as the Vice-Governor of Yogyakarta.
- Papua: Since 2001 local government has a greater role. The governor is required to be of Papuan origins.
- West Papua: The province had split from Papua in 2003. A 2008 regulation by the national government confirms that special autonomy status in Papua also applies to West Papua.
- Jakarta Special Capital Region: Jakarta is the capital of Indonesia. The Governor of Jakarta has the power to appoint and dismiss mayors and regent within the region. The local government is allowed to co-operate with other cities from other countries.
Regency (kabupaten) and city (kota), collectively known as daerah tingkat II, is a local level of government beneath the provincial level. However, they enjoy greater decentralisation of affairs than the provincial body, such as provision of public schools and public health facilities. As at 2019, there were 514 daerah tingkat II (kapupaten + kota) in Indonesia.
Both regency and city are at the same level, having their own local government and legislative body. The difference between a regency and a city lies in differing demographics, size and economics.
Generally the regency has a larger area than the city, and the city has non-agricultural economic activities. A regency is headed by a regent (bupati), and a city is headed by a mayor (wali kota). The regent or mayor and the representative council members are elected by popular vote for a term of 5 years.
Regencies and cities are divided into districts, which have several variations of terms:
- Kecamatan headed by a camat. A camat is a civil servant, responsible to the regent (in a regency) or to the mayor (in a city). Kecamatan are found in most parts of Indonesia.
- Distrik headed by a kepala distrik. Distrik are only found in the provinces of Papua and West Papua and are the equivalent of kecamatan in the rest of Indonesia.
- Kapanewon (for subdivision of regency), headed by a panewu, and Kemantren (for subdivision of city), headed by a mantri pamong praja. The terms are used in the Special Region of Yogyakarta, and are the equivalent of kecamatan in the rest of Indonesia.
Districts are divided into desa (villages) or kelurahan (urban communities). Both desa and kelurahan are of a similar division level, but a desa enjoys more power in local matters than a kelurahan. An exception is Aceh, where districts are divided into mukim before being subdivided further into gampong.
In Indonesian, as in English, a village (desa) has rural connotations. In the context of administrative divisions, a desa can be defined as a body which has authority over the local people in accordance with acknowledged local traditions of the area. A desa is headed by a "head of village" (Indonesian: kepala desa), who is elected by popular vote.
Most Indonesian villages use the term "desa", but other terms are used in some regions:
- Gampong in Aceh
- Nagari in West Sumatra
- Dusun in Bungo Regency (Jambi)
- Kampung in some places in Indonesia:
- Pekon in Pringsewu, Tanggamus, and West Lampung regencies (Lampung)
- In Bali, there are two forms of "desa", i.e. desa dinas (service village) and desa adat (cultural village). Desa dinas deals with administrative functions, while desa adat deals with religious and cultural functions.
- Lembang in Toraja and North Toraja regencies (South Sulawesi)
- Kalurahan in Special Region of Yogyakarta.
Although desa and kelurahan are part of a district, a kelurahan has less autonomy than a desa. A kelurahan is headed by a lurah. Lurahs are civil servants, directly responsible to their camats.
The following table lists the number of current provinces, regencies and cities in Indonesia.
|Level||Type (Indonesian)||Type (English)||Head of government (Indonesian)||Head of government (English)||Number|
|III||Kecamatan, distrik, kapanewon, or kemantren||District||Camat, kepala distrik, panewu, or mantri pamong praja||Head of district||7,024|
|IV||Desa or kelurahan||Village/subdistrict||Kepala desa or lurah||Head of village/subdistrict||81,626|
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- In other places, "dusun" is an administrative division form below "desa".
- In other places, "kampung" is equal with "dusun", except in Bungo, Jambi.
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