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Many historians who have written about the administrative changes implemented in Upper Burma at the end of the 19th century have focused on the village system and the Upper Burma Village Regulation of 1887. They emphasize the transformation of the precolonial local administration, particularly the abolition of the position of myothugyi as an outcome of the introduction of the village system. However, their descriptions pay little attention to local society, simply regarding it as a passive subject affected by colonialism. Thus, in order to elucidate the relation between the colonial administrative policy and local society, this article re-examines the village system and illustrates how the system developed at the district level, by focusing on the early arguments. After investigating the arguments of the central government and district officials on the village system, the article highlights the significance of additional regulatory rules introduced in 1890, and the case of the Shwebo District to reinforce the article’s arguments.