There have been two initial answers I've seen given in some of the research I've done.
The first is that Israeli Prime Minister Menachem Begin intended to use the new body to implement a unilateral autonomy plan. Palestinians would, under this plan, get a limited level of self-rule, but not an independent state. Begin reportedly saw the autonomy plan as a way to cement Israel's control of the territories, and saw a new administration as a way to move towards that under new methods and control.
The other is Ariel Sharon. The claim here goes that Sharon, who would become Israeli Prime Minister only later in 2001, saw it as part of his "iron fist" policy. This means that the idea was to separate the civil from the military, and provide him with more power (he was the new Defense Minister) to tighten policy in the West Bank to his liking.
Neve Gordon, in Israel's Occupation, sees them both as semi-accurate and not mutually exclusive. However, Gordon comes up with some counterpoints to both, and another explanation as well. While Gordon acknowledges the motivations of both to gain power and control for the civil branch in the area, he also argues that they were responding to developments in the territories largely related to opposition to Israel in the territories themselves, in a way meant to hopefully make the administration more effective.
Even so, the Civil Administration was still in reality subordinate to the military, and ended up transferring more power to the military, because it retained the ability to continue making final decisions and influencing the decisions strongly.
That's what I've come across, anyways.
What do you mean?
It sounds like you're referring to the Golan Heights, where it did this in 1981. But Israel still had a military occupation in the West Bank and Gaza at that time, not a civil administration really. Are you referring to the Golan?