The *Arthasastra*, traditionally attributed to Kautilya (Chanakya), is one of the most significant treatises on statecraft, administration, economy, military organization, and urban planning in ancient India. Composed around the fourth century BCE, though incorporating earlier traditions and later interpolations, it provides a systematic account of urban settlements and their administrative, economic, and strategic significance. The text reflects a highly developed understanding of cities as centres of governance, commerce, defence, and social organization. Among the different categories of urban settlements mentioned in the *Arthasastra*, the capital town, *nagara*, and *mahanagara* occupy a prominent place, each representing a distinct level of urban development and administrative importance. The capital town occupied the highest position in the hierarchy of settlements. It was the political and administrative headquarters of the kingdom, serving as the residence of the king, members of the royal family, ministers, military commanders, and senior officials. Kautilya regarded the capital not merely as the seat of power but also as the nerve centre from which the entire kingdom was governed. The prosperity and security of the kingdom depended largely upon the proper planning, maintenance, and defence of the capital. The *Arthasastra* provides detailed guidelines regarding the location of the capital town. It should ideally be situated in a region possessing fertile agricultural land, abundant water resources, forests, mines, and communication routes. The surrounding countryside was expected to support agricultural production and provide essential supplies during normal times as well as during emergencies. Strategic considerations were equally important. The capital should be protected by natural barriers such as rivers, hills, or forests wherever possible, thereby reducing vulnerability to enemy attacks. Urban planning formed an essential aspect of the capital town. Kautilya recommended systematic planning with clearly demarcated roads, residential quarters, marketplaces, public buildings, religious establishments, and administrative offices. Roads were to be broad enough for military movement, transportation, and commercial activities. The city was divided into different functional zones to facilitate efficient administration and ensure public order. Residential areas were often organized according to occupational groups and administrative requirements. The fortification of the capital received special attention in the *Arthasastra*. Defensive walls, bastions, moats, gates, towers, and watch posts formed integral components of urban design. The fort was expected to contain sufficient reserves of food, weapons, water, fuel, medicines, and other necessities to withstand prolonged sieges. Military preparedness was inseparable from urban administration. Armouries, barracks, stables for horses and elephants, and storage facilities were carefully integrated into the city's structure. Administrative institutions occupied a central place in the capital. The royal palace served as the centre of political authority, while various departments managed taxation, trade, agriculture, mining, forests, customs, public works, justice, and military affairs. Numerous officers supervised different aspects of urban life, reflecting the highly centralized administrative system envisioned by Kautilya. Officials such as the Superintendent of Commerce, Superintendent of Weights and Measures, Superintendent of Markets, Superintendent of Mines, and City Superintendent performed specialized responsibilities that ensured the smooth functioning of the capital. Economic activities flourished within the capital town. Markets were carefully regulated to maintain fair prices, prevent fraud, standardize weights and measures, and collect taxes. Merchants from different regions conducted trade under state supervision. The capital served as a hub for domestic and long-distance commerce, facilitating the movement of goods such as textiles, metals, spices, precious stones, agricultural products, and luxury items. State control over commercial transactions reflected Kautilya's emphasis on maximizing revenue while protecting consumers. Craft production constituted another major feature of the capital. Artisans representing various occupations, including metal workers,