Introduction
The Panchayat system is an essential part of rural governance in India, mandated by the Constitution. However, some states have unique circumstances that affect the implementation of this system.

States without Panchayat System
- **Mizoram**:
Mizoram does not have a traditional Panchayat system due to its unique tribal governance structure. Instead, local governance is primarily managed through the Village Councils, which function differently from the Panchayati Raj system.
- **Meghalaya**:
Similar to Mizoram, Meghalaya also operates under a system of traditional village councils in certain areas. The Sixth Schedule of the Constitution grants autonomy to tribal areas, thereby limiting the establishment of a formal Panchayat system.
- **Kerala**:
Kerala has a robust Panchayat system in place, known for its effective local governance. The state actively promotes the Panchayati Raj institutions, making it an inappropriate choice for this question.
- **Nagaland**:
Nagaland does not have a formal Panchayat system either. The state follows a system of traditional governance through village councils, which are recognized and empowered under the governance framework.

Conclusion
Based on the above analysis, the states that do not have a Panchayat system are:
- Mizoram
- Meghalaya
- Nagaland
Therefore, the correct answer to the question is option 'E', indicating that more than one state from the list does not have a Panchayat system.