In India, communities living in and around forests depend on forests to varying degrees. The problems associated with this relationship are largely unexplored. When studying such communities, analytical frameworks, and policies can be evaluated for their relevance and effectiveness. This chapter examines the socio-ecological interaction, using the Institutional Analysis and Development (IAD) framework and the role of formal and informal rules (institutions) in forest management outcomes. The case study involves three forest types in central part of India and the forest-dependent communities that are socially disadvantaged populations. Such forest-dependent communities exhibit strong but variable dependence on forest resources in terms of sustainability of their livelihoods and their awareness about conservation. The methodology is based on a comprehensive literature review that examines the components of an Institutional Aanalysis and Development (IAD) framework, including the socio-physical and ecological factors, for codifying community behavior toward the forest, i.e., the creation of local informal rules on forest use and conservation, its evolution, and its impact on forest management outcomes. The informal rules are important for the sustainable use of forests by local communities as they also impact human-forest relationships. A higher number of rules, i.e., a higher rule density, generally leads to better forest management outcomes. The formal rules of Joint Forest Management (JFM) are uniform across the state. The Principal Component Analysis (PCA) results also show differences in rules in different villages studied and provide greater insight into how the outcomes can be improved. These findings make an important contribution to knowledge on the sustainability of rural livelihoods in central India and sustainable development in relevant global contexts.