The query is like:
Highlight Villages where DistrictCode is 1732 having Colleges within 1 Km.
So I'm selecting features from village feature class which have DistrictCode = 1732.
I don't know what you're trying to say, but I have to assume that these are in fact features. First select by attributes from your villages layer, where District = 1732 (ArcGIS Desktop help; select by attribute), then select by location from your villages within a distance (1km) of your colleges, using the subset selection method (ArcGIS Desktop; select by location).