Besides sharing its geographical borders with India and China, Nepal also shares history with its two giant neighbors. It was
influenced to a large extent by the same incidents that proved to be turning points in the history of India and China.

The earliest recorded history of Nepal goes back over 2,800 years when a tribe of Mongolian people—the Kiratis—arrived in the Himalayan territory, across the Tibetan plateau. The current tribes of Limbu and Rai are believed to be direct descendants of the Kiratis. From the Indu plains, the Buddhist Shakyas are credited with introducing Mahayana Buddhism to Nepal and it became the dominant religion.

Around 300 B.C.E., Nepal received its second round of migrations from India. The Licchavis and the Guptas arrived in Nepal from the northern parts of India. The newcomers overthrew the Kiratis descendants and ushered in Hinduism as the official religion of the
country and alternated power. The Guptas are thought to have introduced the caste system, essentially alien to the dominant cultural system, but it remained localized amoung the elite. The Licchavis ruled for three centuries and were displaced by the Thakuris in 600 B.C.E. 

Ansuvarman, the founder of the Thakuri dynasty, was a shrewd and wealthy king. In order to protect his northern borders from attacks by the Tibetan kings, he married his daughter to a Tibetan prince. Ansuvarman was fond of a valley in the eastern part of his kingdom and founded his capital city there. It was from here in the 10th century that Kasthmandap (Holy Place of Wood) was founded, which has come to be known as Kathmandu. It is at the same the location as Ansuvarman’s palace, in Durbar Square, that the Nepalese monarch stayed til the more modern Narayanhity Palace was built. 

The Thakuri dynasty ruled Nepal for three centuries. The 12th century brought the Malla dynasty. First of the Malla rulers, King Arideva's reign was one of great wealth and prosperity for the Himalayan Kingdom. The Mallas, though Hindu, were tolerant of the other major religion, Buddhism, but were particularly strict on enforcing the caste system. However, the dynasty suffered a major reverse within a century and lost control over large parts of the country, which split into small city-states, as many as 48 at one point. Partly responsible were the frequent invasions of India by Muslim armies from the northwest, which also invaded Nepal several times. It was nearly 100 years later when another Malla king took charge of the country. Meanwhile, two kingdoms began to gain power to challenge the Kathmandu valley, that of the Palpa and the Khas Kingdom.

In 1372, Kathmandu’s king, Jayasthiti Malla, took over the neighboring city-state of Patan, and, a decade later, the city-state of
Bhaktapur. The newly unified Kathmandu Valley kingdom expanded tremendously during the reign of his successor, King Yaksha Malla. By the middle of the next century, Nepal’s borders extended southwards to the Ganga River, and north deep into Tibet. During this time, the caste system became entrenched as an attractive method of social stability, ensuring the Malla reign. However, after his death in 1482, Nepal once again split up into many small states. The situation lasted for almost two centuries. In the 18th century, a new dynasty came to power. 

Prithivi Narayan Shah, born in Gorkha came to power in the Gorkha Kingdom and set about to unify the many princely states in reaction to colonialism. He gradually extended his power until finally, in 1768, he conquered the Kathmandu Valley and established the modern nation of Nepal. Barely 20 years later, war broke out between Nepal and China over Tibet. Lasting nearly a decade,  the Nepalese were defeated and forced to sign a treaty that obligated them to pay annual homage to the Chinese. This tribute continued for over a century and ended only in 1912. In the meanwhile, Nepal also battled the British, who had been conquering territory in India throughout the 18th century. The British were fighting Nepal for control over the southern parts of Nepal and the Ganga plains. Once again, Nepal lost and conceded much of its territory to the British in the war of 1814-16. 

Throughout the tumultuous times, the Shahs continued to be the rulers of Nepal until 1846. they lost power to the powerful
Rana family, big landowners from the west. Jung Bahadur Rana, an upstart, plotted the infamous Kot massacre and assassinated all the court and political leaders of Nepal in a single swoop, proclaimed himself prime minister and took all the executive power from the monarchy, reducing the king to a mere figurehead. The position of prime minister became a hereditary one and the Rana family continued in power for over a century, with the Shah kings virtual prisoners in the palace. After the Indian independence in 1947, Nepali Congress factions in India began plotting a revolution to overthrow the Ranas. In 1950, King Tribhuvan fled to India, and an armed revolt followed. Under pressure from India, the Ranas
were deposed and Tribhuvan Shah became absolute monarch again, but he passed away in 1955. His son, Mahendra, succeeded him.

Nepal was not eager to return to a totalitarian monarchy. Bowing to pressure, King Mahendra  instilled a constitutional parliamentary
system. The first elections under this system were held in 1959 and  Nepali Congress activist and leader B.P.Koirala, became the first elected prime minister of Nepal.

However, the honeymoon between the monarchy and democracy was short-lived and within a year the king dissolved the parliament,
placed the entire cabinet under arrest and resumed total control. He then introduced a decentralized pseudo-democratic system, setting
up the National Panchayat (or, councils). The king chose 16 members of the panchayat, while the other 19 were chosen through indirect elections. While political parties remained banned, the village panchayats nominated members for the district panchayats and which in turn sent members to the “Rashtriya Panchayat” (National Council). The system was rife with corruption and bad governance and not democratic in the least. Upon the death of King Mahendra in 1972, his son Birendra succeeded. Birendra’s lack of political reform drew sharp criticism; riots in 1979 forced the king to call for a national referendum to decide the fate of the panchayat system in favor of multiparty system. Held in May 1980, the referendum gave a narrow victory to the panchayat system, but many believed it to be rigged. The king carried out some promised minor reforms, but the system stayed largely the same.

In 1990, the political parties again pressed the king and the government for change. Leftist parties united to form United Left Front and joined forces with the Nepali Congress Party to launch strikes and demonstrations in the major cities of Nepal. The two-month Jana Andolan was initially dealt with severely, more than 50 people killed by police gunfire and hundreds arrested. But in April, the king finally capitulated as the movement swelled and gained massive ground support. Consequently, he dissolved the panchayat system, lifted the ban on political parties, released all political prisoners, and re-introduced multi-party democracy, reducing much of his own powers.

An interim government was sworn in on April 19, 1990. It was headed by Krishna Prasad Bhattarai as prime minister, who presided over a cabinet made up of members of the Nepali Congress Party, the Communist Party of Nepal, royal appointees and independents. The new government drafted and promulgated a new constitution in November 1990, which enshrined fundamental human rights and established Nepal as a parliamentary democracy under a constitutional monarch. International observers characterized the May 1991 elections as free and fair elections, in which the Nepali Congress won 110 seats out of 205 to form the government. The largest opposition, the United Marxist and Leninist Party (UML), won 69 seats. Girija Prasad Koirala became prime minister and formed the government. In May-June 1992 the structure of Nepal’s new democratic government was completed following local elections in which the Nepali Congress Party scored a convincing victory.

However, the last ten years of democracy has not performed as people had hoped. Continual in-fighting among both of the major parties has fractured governance and has led to numerous governments and reshuffles. Corruption doggs politicians and major reforms have been slow to come. In was in this situation, that in 1996, a minor left party with some members in parliment took up arms and started the 'People's War' The Communist Party of Nepal Maoists still are fighting their insurgency today.

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