After a solemn procession to a ring of standing stones at Bridgend, Glamorgan, Mr Davies, wearing long white robes, complete with head-dress, was officially admitted into the Gorsedd of Bards, the Eisteddfod's ruling body.
His official bardic title is "Ron o Vachen" which translates as "Ron of Machen", the village where Mr Davies was born.
Rare honour
For politicians, entry into the Gorsedd is a rare honour but Mr Davies was singled out for his work in steering through the government's devolution plans.
Mr Davies had played "a determined role at a crucial period in the history of Wales", said the citation read out by Eisteddfod official Huw Thomas.
The Welsh Secretary said: "This is a very exciting time for Wales, and a reflection of the interest in everything Welsh as we move towards the National Assembly next May and the prospect of taking a modern Wales into the 21st century.
"The assembly will be bilingual and the Welsh language will play a full part in its proceedings."
The Secretary of State is not a fluent Welsh speaker but is taking lessons.
The latest initiate into the Gorsedd of Bards has already said he wants to become First Minister of the assembly and a leadership contest takes place within the Wales Labour Party next month.
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