The present study illustrates the insufficient taxonomy records and highlights the better knowledge of microscopic diagnostic tool in polychaete taxonomy. It leads to better understanding of coral-associated polychaete taxonomy in Great Nicobar Islands, India. Total 24 species under 14 genera, 7 orders, and 11 families were identified for the identification key purpose, in spite of 3 species of Phyllocidae, 8 species of Nereidae, 5 species of Eunicidae, 2 species of Spionidae, and 1 species of Opheliidae, Sabellariidae, Terebellidae, Polynoidae, Amphinomidae, and Sabellidae. The current status of taxonomic information varies greatly among taxa and among geographic areas within taxa. Problems include nomenclature, diagnoses, and determination of taxonomic relationships. We provide examples of a variety of these problems. Each species has distinct features of the particular families, and taxonomic section of this chapter to assists the polychaete identification is necessary to assess the biodiversity and taxonomy of at any levels. This chapter considers the importance of monitoring biological diversity, current morphological taxonomy of polychaetes and describes the approach developed for protected areas in Great Nicobar Islands.