This paper focusses its attention on the intricate relationship between the informal organizations of dispute resolution with that of the state. There is no disputing of the fact that democracy and democratic governance is undermined in the absence of effective access to justice. The concept is organically linked to poverty reduction because a poor citizen is denied the spectrum of choices, opportunities of participation and a voice in the decision-making process. Such flaws can be corrected through the informal institutions which provide scope for the flourishing of the democratic process of participation, accountability and responsibility. The informal justice sector with a firm commitment to take justice to the poor man’s doorsteps is playing a creative role in fostering a democratic order. The informal justice system acts as a buffer between the state and civil society and with strong influence and control they interact with community members, kinship groups and other familial networks. They mediate between disputing parties and depending on the contours in which they are embedded they influence the role of the state vis-a-vis the civil society.