<p>Villages, represent the backbone of rural development, embodying diverse social, economic, environmental, cultural, and geographic characteristics that demand context-sensitive sustainability approaches. Recognising that sustainability cannot follow a uniform model, this paper aims to build an informed and evidence-based local sustainability framework based on a comprehensive index system that captures dynamic and static dimensions of village development. Taking the Nagpur Metropolitan Region, India, as a case, the research classifies villages according to these indices and proposes customised development strategies for each village type. This approach streamlines decision-making by integrating potential assessments while accounting for village heterogeneity. Methodologically, the Analytical Hierarchy Process and the Delphi method are employed to weigh village potential indicators, which include socioeconomic, spatial, cultural, and development constraint factors. Meanwhile, Geographic Information System technologies show spatial analysis and help to buffer the selected study villages according to variables. Accordingly, the findings demonstrate that the proposed framework develops a Village Development Potential Index (VDPI), which offers more profound insight into each village’s development path and categorises them into three types: developed, developing, and underdeveloped. In addition, a complementary sensitivity index refines the VDPI by adapting it to village-specific contexts. Together, this framework enables the development of targeted strategies, which can effectively address disparities in resource allocation. Furthermore, it discusses the efficacy of participatory and rural–rural partnerships, offering a replicable approach to rethinking rural development in diverse contexts.</p>