Failure to do so by March 1, the end of a grace period provided when President Reagan endorsed continued registration, could result in a fine of up to $10,000 and a jail term of up to five years, according to Col. Clarence R. Gordon, the D.C. selective service director.

All those born between 1960 and 1963 should already be registered, but those who are not may avoid a threat of prosecution by filling out a form at a post office by the March 1 deadline. Anyone born in 1964 should register within 30 days after his 18th birthday, Gordon said.

The first national report last fall on registration of those born in 1960 and 1961 showed the District ranking below all 50 states in the proportion of potential registrants actually signed up, Gordon said. Only about half of those eligible had registered. But Gordon said the figure was distorted by considering the District as a state, and said the registration level here was "comparable to any other large city."

Gordon attributed the lack of registration to procrastination by eligible young men and the likelihood that many of them did not read or hear news media reports of the registration requirement. He voiced doubt that it stemmed from resistance to military service similar to what was widely demonstated during the Vietnam War period.

One of four men charged in the Baltimore slaying of British antique dealer Phillip Rouse last year was sentenced yesterday to a 40-year prison term. Judge Milton B. Allen, in sentencing 18-year-old Kenneth Johnson for second-degree murder and attempted robbery, said he agreed with the defendant's assertion that he was "willing to engage in a robbery of Rouse's fiancee but not a murder."

"I respect that, but the law doesn't respect that," the judge told the impassive young defendant. ". . . If you want to take a criminal adventure, you want to take everything that flows from it."

Records showed Johnson has been involved seven times with Maryland's juvenile justice system.

Rouse, 34, was gunned down as he chased a bicyclist who had grabbed his fiancee's purse. Johnson and one codefendant pleaded guilty; one was convicted of murder and sentenced to a life term, and the fourth has yet to come to trial.

Dr. Bailus Walker Jr., the former D.C. chief of environmental health, who gained a degree of local fame for his "truth in menus" campaign requiring that Maine lobsters really come from Maine and kosher food really be kosher, has become Michigan's director of public health.

Walker's stepping-stone from the D.C. government to the Michigan job was as head of health standards for the U.S. Labor Department's Occupational Safety and Health Administration. Replacing Walker, according to the Occupational Health and Safety Letter, is R. Leonard Vance, 39, a Republican political appointee who was an assistant Virginia attorney general from 1976 to 1981.

The D.C. Insurance Department has reduced premium increases proposed by two major automobile insurance firms, acting insurance superintendent James R. Montgomery III announced yesterday. At the same time, Montgomery approved the 4.2 percent increase imposed in December by the Government Employees Insurance Co. that had been protested by a policyholder and was the subject of a public hearing. It was the first rise in two years by Geico, the city's largest car insurer.

Montgomery said the 18.5 percent increase proposed by Allstate Insurance Co., the city's third-largest insurer, was cut to 9.9 percent, saving city policyholders $545,000 in premiums, and the 6.7 percent increase proposed by Criterion Insurance Co., a Geico affiliate, was cut to 4.2 percent, saving policholders $87,000.

Montgomery County Council member Scott Fosler has been appointed to a special task force established by the National Association of Counties to ponder President Reagan's "New Federalism" proposals that include a swap of programs between Washington and the states.

Already briefed by Vice President Bush and presidential aide James Baker, the task force will meet next week to consider its position.