Thimphu is the one place in Bhutan where you can break out of the same-same hotel buffets and track down some authentic local tastes. The one thing that is still hard to find is a breakfast or decent coffee before 9am, outside the hotels at least.
Clocktower Square & Around
Lower Norzin Lam is lined with cheap hotels offering simple and inexpensive vegetarian Indian food at lunch and dinner; try the Hotel New Grand or Hotel Ghasel for their good South Indian vegetarian dishes; and the NT Hotel for its inexpensive curries and liquid Tuesday special.
For fresh produce, remember the busy Centenary Farmers' Market (Weekend Market) and the street stalls in Hong Kong Market.