Introduction:
The Indian Constitution, adopted on 26th November 1949, divides the powers and responsibilities between the central government and the state governments. This division is outlined in the 7th Schedule of the Constitution, which categorizes subjects into three lists: Union List, State List, and Concurrent List.

Explanation:
Under the 7th Schedule of the Indian Constitution, the subject of 'Local Government' is mentioned in the State List. The State List consists of subjects on which only the state governments have the power to make laws and regulations.

Significance of Local Government:
Local government refers to the governance of specific areas at the local level, such as municipalities, panchayats, and district councils. It plays a crucial role in the administration and development of local areas, as it is responsible for various functions like infrastructure development, public health, education, and welfare programs.

State List:
The State List contains subjects that are under the exclusive jurisdiction of the state governments. These subjects are primarily related to state-level issues and include matters like public order, police, healthcare, agriculture, and local government.

Other Lists:
1. Union List: The Union List contains subjects on which only the central government can make laws and regulations. It includes matters of national importance such as defense, foreign affairs, atomic energy, railways, and telecommunications.

2. Concurrent List: The Concurrent List consists of subjects on which both the central and state governments have the power to make laws. This list includes subjects like criminal law, marriage and divorce, bankruptcy and insolvency, education, and adoption.

Conclusion:
In the 7th Schedule of the Indian Constitution, the subject of 'Local Government' is mentioned in the State List. This means that the state governments have the authority to make laws and regulations regarding local governance and administration. Local government plays a vital role in the development and management of specific areas, and its inclusion in the State List emphasizes the importance of decentralized governance and decision-making at the local level.