I too have close female relatives living in villages in rural India, and I've spent a lot of time in these villages over the years. I think that the formalisation of these restrictions is cause for serious concern, as it does represent a rolling back of women's rights, which are limited enough already.
I believe that the village in question is in UP, where there is a substantial Muslim population, so I don't know if religion may be a factor here - sorry, as I have only skimmed the article. However, it's still very common practice for Hindu women in northern areas to cover their faces in front of older men, so it is just as likely to be cultural.
In the villages where I have spent time, it's perfectly normal for women to go out unaccompanied in the village, and indeed, it would be almost impossible for them to avoid this. However, it would be unusual for them to leave the village unaccompanied. So I get what eclectic is trying to say. These women have been bound by social restrictions for generations.
However, knowing that certain behaviours will be socially frowned upon is rather different from knowing that those same behaviours are formally prohibited, and so I think this development is worthy of note. Thankfully, I think that the Indian law will override the panchayat's rulings in any case, but it's still a very backward move on their part.
There are groups working to promote women's rights in the rural areas, but in my experience, they are poorly funded, often poorly organised and tend to focus more on helping women in the most desperate situations - they don't always have the resources to focus on the bigger picture. There are feminist movements in Indian cities too, but I would hazard a guess that many educated Indian city dwellers know little more about the lives of rural women than the average Brit!