The correct answer is "2 only." The Gram Nyayalaya Act allows for the inclusion of local social activists as mediators or reconciliators in dispute resolution processes, empowering community members to facilitate justice. However, the first statement is incorrect because Gram Nyayalayas are designed to handle both civil and criminal cases, making them accessible local courts that address a wide range of legal issues for rural populations. This dual capability underscores the Act's aim to enhance access to justice in rural areas, aligning with broader goals of legal empowerment and social justice.