The village of Nagai was created within Nishiokitama District, Yamagata with the establishment of the modern municipalities system on April 1, 1889.

Nagai has a mayor-council form of government with a directly elected mayor and a unicameral city legislature of 16 members.

The city contributes two members to the Yamagata Prefectural Assembly shared with Nishiokitama District.

In terms of national politics, the city is part of Yamagata District 2 of the lower house of the Diet of Japan.

The economy of Nagai is based on agriculture and light manufacturing of electronic and robotic components and pharmaceuticals.