Union Territories & Panchayats
This Part applies to Union Territories too, with "Governor" read as "Administrator" and "State Legislature" read as the UT's own Legislative Assembly (where it has one) - the President may also direct, by notification, that this Part apply to a UT with specified exceptions and modifications.
This ensures Union Territories also get Panchayati Raj local self-government, adapting the terminology (substituting the UT's Administrator for a Governor, etc.) so the same rural self-government framework can function outside the full-State context too.
This is why Union Territories with rural areas can also have functioning Panchayats, following essentially the same constitutional framework as states, just with the Administrator standing in for a Governor.