This study examines the contribution of Traditional Knowledge (TK) to the Village Development Index (Indeks Desa Membangun, IDM) following the implementation of Law No. 6/2014 on Village Administration in Indonesia, with a specific focus on North Tapanuli Regency, home to the majority of the Batak Toba ethnic group. TK is a critical element in local development discourse, particularly as modernization has often failed to deliver sustainable development outcomes in many developing countries. Adopting a qualitative research approach, data were collected through in-depth interviews and literature review. Seven key informants were interviewed, including traditional leaders from the Dalihan Natolu (Three-Legged Stove) institution, village heads, sub-district officials, directors of village-owned enterprises (Badan Usaha Milik Desa, Bumdes), NGO activists, and local pastors. Data triangulation was employed to enhance the credibility and depth of findings, aiming to construct a holistic understanding of the research phenomenon. Thematic analysis of interview transcripts revealed that TK is still predominantly treated as cultural heritage (CH), rather than being embraced as a living cultural framework (Cultural Living, CL) that guides village leadership behavior in managing village funds. Currently, TK mainly governs social and ceremonial aspects of community life—such as weddings, funerals, and traditional rituals—rather than informing governance or development strategies at the village level.