Lot of experimental work has been done on the polytypism of CdI2 and a vast structural data is now available, but the phenomenon of polytypism is yet to be completely understood. It s a fact that all polytypes consist of basic structures 2H and 4H.In this paper it has been established that phase transformation 4H2H is hindered by the impurities present in the starting material. Further, it is suggested that vacancies also play a role in the formation of polytypes.