North clashed heads with team mate Richard Hibbard and was clearly unconscious as he fell to the ground but he immediately came round and finished the match.
"Following a full post-incident review, World Rugby believes that Wales player George North should not have remained on the field of play following a head impact in the 61st minute of the Wales versus England match on Friday night," the sport's ruling body said in a statement.
"The World Rugby head injury protocol clearly states that a player should be immediately and permanently removed from the field of play where there are any visible symptoms or suspicion of a potential concussion."
World Rugby said, however, that it accepted the Welsh Rugby Union's (WRU) explanation that neither the team's medical staff nor the independent doctor saw the incident.
"We understand that the medics acted within the framework of information they had at the time and would have taken a different course of action had they had direct pitch-side visibility or access to the same broadcast footage seen by those watching on television," World Rugby said.
North had been forced off the pitch for eight minutes in the first half after sustaining a kick to the head but he returned to the fray and his missed tackle on Jonathan Joseph allowed the England centre to cross for his team's second try.
The WRU has said it was a mistake to allow North to continue following the second head clash.
"Having seen it since, he should definitely have been removed," Wales medical manager Prav Mathema said.
"At that moment it was clear to see that he had a momentary loss of consciousness and, because of that, irrespective of him having no signs or symptoms, we've been dealing with George North as a concussion.
"We've seen where our protocols need to improve."
North is being assessed ahead of Wales's next game against Scotland at Murrayfield on Sunday.
(Reporting by Ed Osmond, editing by Justin Palmer)
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