The growth of this ‘Summer Colony’ for the plains people brought merchants and traders to Kodaikanal. A market sprang up on the last part of Coolie Ghat Road, to supply groceries, meat, bred, vegetables, etc., to the visitors. Problems of sanitation arise as the number of shops increased in the market. In sanitary conditions lead to contagious diseases. Naturally the residents and he visitors complained about such unhygienic conditions and finally, the authorities in Madras decided to constitute Kodaikanal as a Municipality. The Municipality was constituted on 16-08-1899 and came into existence on October 1st, 1899, and was the smallest Municipality in the then Madras Presidency, with the population around 1912 members.

At that time, the Municipal Council consisted of 12 members, all nominated by the Government. In this number was increased to 16, whom 4 were nominated and the remaining 12 elected. In 1950, though the strength remained 16, all the members were elected. The responsibility of the Municipality included looking after the roads, sanitation, public health, water supply, electricity, primary and secondary education, etc.

In 1960, the Municipality was once again reorganized and constituted as a Township Committee with 11 nominated members, 8 of whom were officials and 3 non – officials. The Collector Madurai was made the ex- officio Chairman.

In 1961, the Taluk organization became the “Kodaikanal Panchayat Union”, with a number of village panchayats and Kodaikanal panchayat. The work of the Panchayat Union is to look after the implementation of the development program of the Government. The present Kodaikanal Township Committee has 19 members, all nominated. Eleven members are chosen from among the officials and 8 from non-officials.