The village of Lachen has a unique system of administration and local governance called Dzumsa which literally mean a Gathering Place. This system of self governance was introduced sometime in the beginning of the 17th century. Even after the Panchayat system was introduced all over Sikkim it was not imposed in Lachen, and the Dzumsa continues to function till this day.
     The Dzumsa is a group of people chosen by the villagers to represent them and manage the village affairs. The council of representatives known as lehyan consists of two pipons who act as the village heads, five to six gyambos who are the village elders assisting the pipons in their work , two tsipos or treasurers, two gyapons who act as messengers between the Dzumsa and the public, and seven monks.. This council or lheyan is changed every year unless the villagers wish to renew their mandate.
     Traditionally the Dzumsa system came into existence to organize and regulate the people while dispensing the benefits to the entire community. To accomplish its objectives the Dzumsa has since its inception, enforced many rules of conduct on the people. The Dzumsa not only determines the code of conduct for all individuals in social as well as economic issues, but also implements and monitors them, while collecting fines from those who break the norms and rules. The Dzumsa performs all the developmental functions that are assigned to the Panchayats in other areas and also have customary judical power for trial of cases in their respective villages.
     The uniqueness about the Dzumsa is that it has its own revenue collection powers unlike other panchayats. In earlier days that was limited to collecting land tax but in modern times they also allot government contracts etc. through auctions and take a certain percentage as tax. The revenue generated through taxes, fines and other sources is redistributed among all households in installments throughout the year or as a one time payment at the end of the year.