@spsenthilraja– Welcome to the Piklist community!

Congratulations, you’ve found a bug with the front-end forms. We’ll get it fixed in the next version of Piklist.

A bit messy but I managed to get it going with a bit of a work-around for the time being.

First I created a hidden field to temporarily store the category/taxonomy value

piklist(
  'field', array(
    'scope' => 'post_meta',
    'type'  => 'hidden',
    'field' => 'category',
    'label' => __('Category')
  ) 
);

To get the taxonomy’s to display with a select dropdown where parents are disabled, I set the new select field’s name and id to that of the hidden field above.

<div class="form-group piklist-theme-field-container">
<div class="piklist-theme-label">
  <label for="_post_meta[category]" class="piklist-field-part piklist-label piklist-label-position-before ">Category</label>
</div>
<select id="_post_meta_category_0" name="_post_meta[category]" class="ad-category form-control _post_meta_category piklist-field-element">
<?php
foreach ($parents as $parent => $value)
{
  echo '<option disabled="disabled" value="0">'.$value->name.'</option>';
  $terms = get_terms( 'classifieds_categories', array(
    'hide_empty' => false,
    'parent' => $value->term_id
  ) );

  foreach ($terms as $term)
  {
    echo '<option value="'.$term->term_id.'"> - '.$term->name.'</option>';
  }
}
?>
</select>
</div>

With a “save_post” hook I then used the temporary stored category meta value to set the taxonomy terms

function custom_save_taxonomy( $post_id ) {
    $post = get_post( $post_id );
    if($post->post_type != 'classifieds')
        return $post_id;

    $category = get_post_meta( $post_id, 'category', true );
    wp_set_post_terms($post_id, array($category), 'classifieds_categories', true);
    $terms = wp_get_post_terms($post_id, 'classifieds_categories' );
    foreach($terms as $term){
        while($category != 0 && !has_term( $category, 'classifieds_categories', $post )){
            // move upward until we get to 0 level terms
            wp_set_post_terms($post_id, array($category), 'classifieds_categories', true);
            $term = get_term($category, 'classifieds_categories');
        }
    }
    return true;
}
add_action( 'save_post', 'custom_save_taxonomy' );

Hope this helps someone, works for what I needed to do:
https://dl.dropboxusercontent.com/s/asew27emsuejmal/2015-12-14%20at%2014.27.jpg