This article discusses the need and importance of information literacy as an essential component in information society. The article highlights the role of information and information technology as well as the relationship between information and literacy. This article also studies the impact of ICT in rural areas and examines the awareness of the term like, information, information literacy, computer literacy etc. in the rural communities in Manipur, India. Further, it elaborates the need for information literacy and challenges faced by the rural communities in the global information environment.