At the time of his enthronement on 14 March 1927, the administration apparatus was still based on the Dual System instituted by Zhabdrung Ngawang Namgyal in 1616. The administration differed from region to region. The First King desired to reform this set up and institute a modern form of administration. However, since he was fully involved in stabilizing the new Kingdom he could not execute his wish. The regional lords still continued to administer in the same way as it was done during the era of the Desis. The only difference was that now the central authority was with the King. Thus, his successor Druk Gyalpo Jigme Wangchuck took up this responsibility as important if Bhutan was to witness progress.

The Druk Gyalpo assumed absolute power and set up a direct line of authority from himself down. He made every official accountable directly to him. He made all the necessary appointments of the officials in different posts. All power, both religious and temporal, was in his hands. All the powers were centralized. This was related to the need of the time for decentralization of power could lead to the fall of the infant Kingdom. The regional lords were enjoying so much power and authority that the people in their jurisdiction suffered. Thus, the strategy of centralization of power was targeted towards the creation of a uniform administrative mechanism for the country that would benefit the people.

A shift from the earlier system was the institution of Nangi Lhengye Zhi, the central cabinet that comprised four important officials to assist him in the over all administration of the country. They were the Zhung Kalyon, the executive officer; the Zhung Dronyer, the chief of protocol; the Zhung Zimpon or Gongzim, the chief chamberlain; and the Thimphu Dzongpon/Punakha Dzongpon (Thimphup/Punap). In summer when the central cabinet moved to Thimphu, the Thimphu Dzongpon was a member and in winter when it moved to Punakha it was the Punakha Dzongpon. The Gongzim was most of the time stationed in Kalimpong as political agent for Bhutan, working with the political officials of the British government.

Many un-necessary posts were abolished each time regional leaders died. For instance, the post of Daga Penlop was totally abolished while he retained the title of Trongsa Penlop for himself. The powers of the Dzongpons especially that of Punakha, Thimphu and Wangdue Phodrang were also limited. For instance, they could appoint only the white scarf officers serving under them while their red scarf officers like Zimpon, Dronyer and Nyerchen was done by the King. This change ensured that the capable people were given important responsibilities and opportunities to climb up the different rungs of the ladder of success. Further, the number of people serving as Dzongpons was drastically reduced. This move consequently eased the tax burden on the people and the resource of the State. Even the appointment of Je Khenpo was centralized while that of the Lopens required his approval. This change helped in minimizing influence of the monastic body on the temporal affairs which was so strong during the era of the Desis.

In the past, the Dzongpons and Penlops also controlled the revenue in their region. They did not have a uniform and consistent system to collect taxes. The revenue was used unplanned and without any consideration of improving the living standards of the people. The bulk of the revenue collected was used for the maintenance of the regional leaders and their attendants. The revenue collected was not used for welfare projects. Thus, the King also centralized the power of revenue collection. He created an effective mechanism of tax collection and the revenue was effectively used on developmental activities. It was during his reign that Bhutan cautiously began to forsake the policy of isolation. (Refer Margaret Williamsons book)

When the reign of the nation was passed down to his son the Third Druk Gyalpo the administrative mechanism of Bhutan had been transformed from a feudal society to that of a modern State.