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The history of Nepal began in, and centres on, the Kathmandu Valley. Over the centuries Nepal's boundaries have extended to include huge tracts of neighbouring India, and contracted to little more than the Kathmandu Valley and a handful of nearby city-states. Though it has ancient roots, the modern state of Nepal emerged only in the 18th century.

Squeezed between the Tibetan plateau and the plains of the subcontinent - the modern-day giants of China and India - Nepal has long prospered from its location as a resting place for traders, travellers and pilgrims. A cultural mixing pot, it has bridged cultures and absorbed elements of its neighbours, yet retained a unique character. After travelling through India for a while, many travellers notice both the similarities and differences. 'Same, same', they say, '…but different'.

The Kiratis & Buddhist beginnings

Nepal's recorded history kicks off with the Hindu Kiratis. Arriving from the east around the 7th or 8th century BC, these Mongoloid people are the first known rulers of the Kathmandu Valley. King Yalambar (the first of their 29 kings) is mentioned in the Mahabharata, the Hindu epic, but little more is known about them.

In the 6th century BC, Prince Siddhartha Gautama was born into the Sakya royal family of Kapilavastu, near Lumbini, later embarking on a path of meditation and thought that led him to enlightenment as the Buddha. The religion that grew up around him continues to shape the face of Asia.

Around the 2nd century BC, the great Indian Buddhist emperor Ashoka (c 272-236 BC) visited Lumbini and erected a pillar at the birthplace of the Buddha. Popular legend recounts how he then visited the Kathmandu Valley and erected four stupas (pagodas) around Patan, but there is no evidence that he actually made it there in person. In either event, his Mauryan empire (321-184 BC) played a major role in popularising Buddhism in the region, a role continued by the north Indian Buddhist Kushan empire (1st to 3rd centuries AD).

Over the centuries Buddhism gradually lost ground to a resurgent Hinduism and by the time the Chinese Buddhist pilgrims Fa Xian (Fa Hsien) and Xuan Zang (Hsuan Tsang) passed through the region in the 5th and 7th centuries the site of Lumbini was already in ruins.

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Licchavis, Thakuris, then darkness

Buddhism faded and Hinduism reasserted itself with the arrival from northern India of the Licchavis. In AD 300 they overthrew the Kiratis, who resettled in the east and are the ancestors of today's Rai and Limbu people.

Between the 4th and 8th centuries, the Licchavis ushered in a golden age of cultural brilliance. The chaityas (stupas) and monuments of this era can still be seen at the Changu Narayan Temple, north of Bhaktapur, and in the backstreets of Kathmandu's old town. Their strategic position allowed them to prosper from trade between India and China. It's believed that the original stupas at Chabahil, Bodhnath and Swayambhunath date from the Licchavi era.

Amsuvarman, the first Thakuri king, came to power in 602, succeeding his Licchavi father-in-law. He consolidated his power to the north and south by marrying his sister to an Indian prince and his daughter Bhrikuti to the great Tibetan king Songsten Gompo. Together with the Gompo's Chinese wife Wencheng, Bhrikuti managed to convert the king to Buddhism around 640, changing the face of both Tibet and, later, Nepal.

From the late 7th century until the 13th century Nepal slipped into its 'dark ages', of which little is known. Tibet invaded in 705 and Kashmir invaded in 782. The Kathmandu Valley's strategic location, however, ensured the kingdom's growth and survival. King Gunakamadeva is credited with founding Kantipur, today's Kathmandu, around the 10th century. During the 9th century a new lunar calendar was introduced, one that is still used by Newars to this day.

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The golden age of the Mallas

The first of the Malla kings came to power in the Kathmandu Valley around 1200. The Mallas (literally 'wrestlers' in Sanskrit) had been forced out of India and their name can be found in the Mahabharata and in Buddhist literature. This period was a golden one that stretched over 550 years, though it was peppered with fighting over the valuable trade routes to Tibet.

The first Malla rulers had to cope with several disasters. A huge earthquake in 1255 killed around one-third of Nepal's population. A devastating Muslim invasion by Sultan Shams-ud-din of Bengal less than a century later left plundered Hindu and Buddhist shrines in its wake, though the invasion did not leave a lasting cultural effect here (unlike in the Kashmir Valley which remains Muslim to this day). In India the damage was more widespread and many Hindus were driven into the hills and mountains of Nepal, where they established small Rajput principalities.

Apart from this, the earlier Malla years (1220-1482) were largely stable, reaching a high point under the third Malla dynasty of Jayashithi Malla (1382-1395), who united the valley and codified its laws, including the caste system. The mid-13th century saw the de facto rule of Queen Devaladevi, the most powerful woman in Nepal's history.

After the death of Jayashithi Malla's grandson Yaksha Malla in 1482, the Kathmandu Valley was divided up among his sons into the three kingdoms of Bhaktapur (Bhadgaon), Kathmandu (Kantipur) and Patan (Lalitpur). They proceeded to fight with each other over the right to control the rich trading routes with Tibet.

The rest of what we today call Nepal consisted of a fragmented patchwork of almost 50 independent states, from Palpa to Jumla, and the semi-independent states of Banepa and Pharping, most of them minting their own coins and maintaining standing armies.

One of the most important of these was the Nepali-speaking Khasa empire (Western Mallas), based in the far west in the Karnali basin around Sinja and Jumla. The kingdom peaked in the 13th and 14th centuries, only to fragment in the 15th century. Its lasting contribution was the Nepali language that is spoken today as the unifying national language.

Nepal's most profound export was perhaps its architecture; in the 13th century the Nepali architect Arniko travelled to Lhasa and the Mongol capital in Beijing, bringing with him the design of the pagoda, thus changing the face of religious temples across Asia.

The rivalry between the three kingdoms of the Kathmandu Valley found its expression in the arts and culture, which flourished in the competitive climate. The outstanding collections of exquisite temples and buildings in each city's Durbar Square are testament to the huge amounts of money spent by the rulers to outdo each other.

The building boom was financed by trade, in everything from musk and wool to salt, Chinese silk and even yak tails. The Kathmandu Valley stood at the departure point for two separate routes into Tibet, via Banepa to the northeast and via Rasuwa and the Kyirong Valley near Langtang in the northwest. Traders would cross the jungle-infested Terai during winter to avoid the virulent malaria and then wait in Kathmandu for the mountain passes to open later that summer. Kathmandu grew rich and its rulers converted their wealth into gilded pagodas and ornately carved royal palaces. In the mid-17th century Nepal gained the right to mint Tibet's coins using Tibetan silver, further enriching the kingdom's coffers.

In Kathmandu King Pratap Malla (1641-74) oversaw that city's cultural highpoint with the construction of the Hanuman Dhoka Palace, the Rani Pokhari pond and the first of several subsequent pillars that featured a statue of the king facing the protective Temple of Taleju, who the Mallas had by that point adopted as their protective deity. The mid-17th century also saw a highpoint of building in Patan.

Around 1750 King Jaya Prakash Malla built Kathmandu's Kumari Temple. Not long afterwards came the Nyatapola Temple in Bhakatapur, the literal highpoint of pagoda-style architecture in Nepal.

The Malla era shaped the religious as well as artistic landscape, introducing the dramatic chariot festivals of Indra Jatra and Machhendranath. The Malla kings shored up their position by claiming to be reincarnations of the Hindu god Vishnu and establishing the cult of the kumari, a living goddess whose role it was to bless the Malla's rule during an annual celebration.

The cosmopolitan Mallas also absorbed foreign influences. The Indian Mughal court influenced Malla dress and painting, presented the Nepalis with firearms and introduced the system of land grants for military service, a system which would have a profound effect in later years. Persian terminology was introduced to the court administration and in 1729 the three kingdoms sent presents to the Qing court in Beijing, which from then on viewed Nepal as a tributary state. In the early 18th century Capuchin missionaries passed through Nepal to Tibet, giving the West its first descriptions of exotic Kathmandu.

But change didn't only come from abroad. A storm was brewing inside Nepal, just 100km to the east of Kathmandu.

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Unification under the Shahs

It took more than a quarter of a century of conquest and consolidation, but by 1768 Prithvi Narayan Shah, ruler of the tiny hilltop kingdom of Gorkha (halfway between Pokhara and Kathmandu), stood poised on the edge of the Kathmandu Valley, about to realise his dream of a unified Nepal.

Prithvi Narayan had taken the strategic hilltop fort of Nuwakot in 1744 and had blockaded the valley, after fighting off reinforcements from the British East India Company. In 1768 Shah took Kathmandu, sneaking in while everyone was drunk during the Indra Jatra festival. A year later he took Kirtipur, finally, after three lengthy failed attempts. In terrible retribution his troops hacked 120 pounds of noses and lips off Kirtipur's residents; unsurprisingly, resistance throughout the valley quickly crumbled. In 1769 he advanced on the three Malla kings, who were quivering in Bhaktapur, ending the Malla rule and unifying Nepal.

Shah moved his capital from Gorkha to Kathmandu, establishing the Shah dynasty, which rules to this day, with its roots in the Rajput kings of Chittor. Shah died just six years later in Nuwakot but is revered to this day as the founder of the nation.

Shah had built his empire on conquest and his insatiable army needed ever more booty and land to keep it satisfied. Within six years the Gurkhas had conquered eastern Nepal and Sikkim. The expansion then turned westwards into Kumaon and Garhwal, only halted on the borders of the Punjab by the armies of the powerful one-eyed ruler Ranjit Singh.

The kingdom's power continued to grow until a 1792 clash with the Chinese in Tibet led to an ignominious defeat, during which Chinese troops advanced down the Kyirong Valley to within 35km of Kathmandu. As part of the ensuing treaty the Nepalis had to cease their attacks on Tibet and pay tribute to the Chinese emperor in Beijing; the payments continued until 1912.

The expanding Nepali boundaries, by this time stretching all the way from Kashmir to Sikkim, eventually put it on a collision course with the world's most powerful empire, the British Raj. Despite early treaties with the British, disputes over the Terai led to the first Anglo-Nepali war, which the British won after a two-year fight. The British were so impressed by their enemy that they decided to incorporate Gurkha mercenaries into their own army.

The 1816 Sugauli treaty called a halt to Nepal's expansion and laid down its modern boundaries. Nepal lost Sikkim, Kumaon, Garhwal and much of the Terai, though some of this land was restored to Nepal in 1858 in return for support given to the British during the Indian Mutiny (Indian War of Independence). A British resident was sent to Kathmandu to keep an eye on things but the Raj knew that it would be too difficult to colonise the impossible hill terrain, preferring to keep Nepal as a buffer state. Nepalis to this day are proud that their country was never colonised by the British, unlike the neighbouring hill states of India.

Following its humiliating defeat, Nepal cut itself off from all foreign contact from 1816 until 1951. The British residents in Kathmandu were the only Westerners to set eyes on Nepal for more than a century.

On the cultural front, temple construction continued impressively, though perhaps of more import to ordinary people was the introduction, via India, of chillis, potatoes, tobacco and other New World crops.

The Shah rulers, meanwhile, swung from ineffectual to seriously deranged. At one point the kingdom was governed by a twelve-year-old female regent, in charge of a nine-year-old king! One particularly sadistic ruler, Crown Prince Surendra, expanded the horizons of human suffering by ordering subjects to jump down wells or ride off cliffs, just to see whether they would die.

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The Ranocracy

The death of Prithvi Narayan Shah in 1775 set in motion a string of succession struggles, infighting, assassinations, feuding and intrigue that culminated in the Kot Massacre in 1846. This bloody night was engineered by the young Chhetri noble, Jung Bahadur; it catapulted his family into power and sidelined the Shah dynasty.

Ambitious and ruthless, Jung Bahadur organised (with the queen's consent) for his soldiers to massacre several hundred of the most important men in the kingdom - noblemen, soldiers and courtiers - while they were assembled in the Kot courtyard adjoining Kathmandu's Durbar Square. He then exiled 6000 members of their familles to prevent revenge attacks.

Jung Bahadur took the title of Prime Minister and changed his family name to the more prestigious Rana. He later extended his title to maharajah (king) and decreed it hereditary. The Ranas became a second 'royal family' within the kingdom and held the reins of power - the Shah kings became listless figureheads, requiring permission even to leave their palace.

The hereditary family of Rana prime ministers held power for more than a century, eventually intermarrying with the Shahs. Development in Nepal stagnated, although the country did manage to preserve its independence. Only on rare occasions were visitors allowed into Nepal.

Jung Bahadur Rana travelled to Europe in 1850, attended the opera and the races at Epsom, and brought back a taste for neoclassical architecture, examples of which can be seen in Kathmandu today. To the Ranas' credit, sati (the Hindu practice of casting a widow on her husband's funeral pyre) was abolished in 1920, 60, 000 slaves were released from bondage and a school and a college were established in Kathmandu. But while the Ranas and their relations lived lives of opulent luxury, the peasants in the hills were locked in a medieval existence.

Modernisation began to dawn on Kathmandu with the opening of the Bir Hospital, Nepal's first, in 1889, the first piped water system, limited electricity and the construction of the huge Singha Durbar palace. In 1923 Britain formally acknowledged Nepal's independence and in 1930 the kingdom of Gorkha was renamed the kingdom of Nepal, reflecting a growing sense of national consciousness.

The arrival of the Indian railway line at the Nepali border greatly aided the transportation of goods but sounded a death knell for the caravan trade that bartered Nepali grain and rice for Tibetan salt. The transborder trade suffered another setback when the British opened a second, more direct trade route with Tibet through Sikkim's Chumbi Valley (the real nail in the coffin came in 1966, when the Chinese closed the border to local trade).

Elsewhere in the region dramatic changes were taking place. The Nepalis supplied logistical help during Britain's invasion of Tibet in 1903, and over 300, 000 Nepalis fought in WWI and WWII, garnering a total of 13 Victoria Crosses - Britain's highest military honour - for their efforts.

After WWII, India gained its independence and the communist revolution took place in China. Tibetan refugees fled into Nepal in the first of several waves when the new People's Republic of China tightened its grip on Tibet, and Nepal became a buffer zone between the two rival Asian giants. At the same time King Tribhuvan, forgotten in his palace, was being primed to overthrow the Ranas.

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Restoration of the Shahs

In late 1950 King Tribhuvan was driving himself to a hunting trip at Nagarjun when he suddenly swerved James-Bond-style into the expecting Indian embassy, claimed political immunity and was flown to India. Meanwhile, the recently formed Nepali Congress party, led by BP Koirala, managed to take most of the Terai by force from the Ranas and established a provisional government that ruled from the border town of Birganj. India exerted its considerable influence and negotiated a solution to Nepal's turmoil, and King Tribhuvan returned in glory to Nepal in 1951 to set up a new government composed of demoted Ranas and members of the Nepali Congress party.

Although Nepal gradually reopened its long-closed doors and established relations with other nations, dreams of a new democratic system were not permanently realised. Tribhuvan died in 1955 and was succeeded by his cautious son Mahendra. A new constitution provided for a parliamentary system of government and in 1959 Nepal held its first general election. The Nepali Congress party won a clear victory and BP Koirala became the new prime minister. In late 1960, however, the king decided the government wasn't to his taste after all, had the cabinet arrested and swapped his ceremonial role for real control (much as King Gyanendra would do 46 years later).

In 1962 Mahendra decided that a partyless, indirect panchayat (council) system of government was more appropriate to Nepal. The real power remained with the king, who chose 16 members of the 35-member National Panchayat, and appointed the prime minister and his cabinet. Political parties were banned.

Mahendra died in 1972 and was succeeded by his 27-year-old British-educated son Birendra. Nepal's hippy community was unceremoniously booted out of the country when visa laws were tightened in the run-up to Birendra's coronation in 1975. Simmering discontent with corruption, the slow rate of development and the rising cost of living erupted into violent riots in Kathmandu in 1979. King Birendra announced a referendum to choose between the panchayat system and one that would permit political parties to operate. The result was 55% to 45% in favour of the panchayat system; democracy had been outvoted.

Nepal's military and police apparatus were among the least publicly accountable in the world and strict censorship was enforced. Mass arrests, torture and beatings of suspected activists are well documented, and the leaders of the main opposition, the Nepali Congress, spent the years between 1960 and 1990 in and out of prison.

During this time there were impressive movements towards development, namely in education and road construction, with the number of schools increasing from 300 in 1950 to over 40, 000 by 2000. But the relentless population growth (Nepal's population grew from 8.4 million in 1954 to 26 million in 2004) cancelled out many of these advances, turning Nepal from an exporter to a net importer of food within a generation. It is also widely accepted that a huge portion of foreign aid was routinely creamed off into royal and ministerial accounts.

During this time over one million hill people moved to the Terai in search of land and several million crossed the border to seek work in India (Nepalis are able to cross the border and work freely in India), creating a major population shift in favour of the now malaria-free Terai.

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People power

In 1989, as communist states across Europe crumbled and pro democracy demonstrations occupied China's Tiananmen Square, Nepali opposition parties formed a coalition to fight for a multiparty democracy with the king as constitutional head; the upsurge of protest was called the Jana Andolan, or People's Movement.

In early 1990 the government responded to a nonviolent gathering of over 200,000 people with bullets, tear gas and thousands of arrests. After several months of intermittent rioting, curfews, a successful strike, and pressure from various foreign-aid donors, the government was forced to back down. The people's victory did not come cheaply; it is estimated that more than 300 people lost their lives.

On 9 April King Birendra announced he was lifting the ban on political parties. On 16 April he asked the opposition to lead an interim government, and announced his readiness to accept the role of constitutional monarch. Nepal was a democracy.

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Democracy & the Maoist uprising

In May 1991, 20 parties contested a general election for a 205-seat parliament. The Nepali Congress won power with around 38% of the vote. The Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML) won 28%, and the next largest party, the United People's Front, 5%.

In the years immediately following the election, the political atmosphere remained uneasy. In April 1992 a general strike degenerated into street violence between protesters and police, and resulted in a number of deaths.

In late 1994 the Nepali Congress government, led by GP Koirala (brother of BP Koirala) called a midterm election. No party won a clear mandate, and a coalition formed between the CPN-UML and the third major party, the Rastriya Prajatantra Party (RPP), the old panchayats, with the support of the Nepali Congress. This was one of the few times in the world that a communist government had come to power by popular vote.

Political stability did not last long, and the late 1990s were littered with dozens of broken coalitions, dissolved governments and sacked politicians.

In 1996 the Maoists (of the Communist Party of Nepal), fed up with government corruption, the failure of democracy to deliver improvements to the people, and the dissolution of the Communist government, declared a 'people's war'. The insurgency began in the poor regions of the far west and gathered momentum, but was generally ignored by the politicians. The repercussions of this nonchalance finally came to a head in November 2001 when the Maoists broke their ceasefire and an army barracks was attacked west of Kathmandu. After a decade of democracy it seemed increasing numbers of people, particularly young Nepalis and those living in the countryside, were utterly disillusioned.

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Royal troubles

On 1 June 2001 the Nepali psyche was dealt a huge blow when Crown Prince Dipendra gunned down almost every member of the royal family during a get-together in Kathmandu. A monarch who had steered the country through some extraordinarily difficult times was gone. When the shock of this loss subsided the uncertainty of what lay ahead hit home.

The beginning of the 21st century saw the political situation in the country turn from bad to worse. Prime ministers were sacked and replaced in 2000, 2001, 2002, 2003, 2004 and 2005, making a total of nine governments in 10 years. The fragile position of Nepali politicians is well illustrated by Sher Bahadur Deuba, who was appointed prime minister for the second time in 2001, before being dismissed in 2002, reinstated in 2004, sacked again in 2005, thrown in jail on corruption charges and then released! Against such a background, modern politics in Nepal has become more about personal enrichment than public service.

Several Maoist truces, notably in 2003 and 2005, offered some respite, though these reflected as much a need to regroup and rearm as they did any move towards a lasting peace. By 2005 nearly 13, 000 people, including many civilians, had been killed in the insurgency, more than half of them since the army joined the struggle in 2001. Amnesty International accused both sides of horrific human-rights abuses, including executions, abductions, torture and child conscription.

The Maoist insurgency has, ironically, only worsened the plight of the rural poor by diverting much-needed government funds away from development and causing aid programmes to suspend activity due to security concerns. Until there is real social change and economic development in the countryside, the frustrations fuelling Nepal's current insurgency look set only to continue.

Nepal's 12-year experiment with democracy faced a major setback in October 2002 when the sour-faced King Gyanendra, frustrated with the political stalemate and the continued delay in holding national elections, dissolved the government. Gyanendra again dissolved the government in February 2005, amid a state of emergency, promising a return to democracy within three years. The controversial king has not been helped by his dissolute son (and heir) Paras, who has allegedly been involved in several drunken hit-and-run car accidents, one of which killed a popular Nepali singer.

Entry into the World Trade Organisation in 2004 and the creation of the regional South Asian free trade agreement in 2006 may offer some long-term economic advances but the country remains deeply dependent on foreign aid, which makes up 25% of the state budget and over two-thirds of Nepal's total development budget. The aid industry has come under increased criticism for failing to generate the economic and social development that had been expected. Recent years have seen a move away from the megaprojects of the 1960s and '70s to smaller-scale community cooperation and microfinancing.

Everything changed in April 2006, when parlimentary democracy was grudgingly restored by the king, following days of mass demonstrations, curfews and the deaths of 16 protestors. The next month the newly restored parliament reduced the king to a figurehead, ending powers the royal Shah lineage had enjoyed for over 200 years.

The removal of the king was the price required to bring the Maoists to the negotiating table and a peace accord was signed later that year, drawing a close to the bloody decade-long insurgency. The pace of political change in Nepal was remarkable. The Maoists achieved a majority in the elections of 10 April 2008 and a month later parliament abolished the monarchy by a margin of 560 votes to four, ending 240 years of royal rule. Former Maoist ‘terrorists’ became cabinet ministers, members of the People’s Liberation Army joined the national army and an interim constitution was drafted to help bind the former guerrillas into the political mainstream. A renewed optimism in the political process was palpable throughout Nepal.

By 2008 a new government was formed, with former guerrilla leaders Pushpa Kamal Dahal (known by his nom de guerre Prachanda, which means ‘the Fierce’) as prime minister and Dr Baburam Bhattarai as finance minister. Ironically the ‘People’s’ armed struggle was led by two high-caste intellectuals.

There has still been plenty of potential for political instability. Calls for greater representation by groups such as the Madhesi of the Terai (who make up 35% of the population and live in the most productive and industrialised part of country) have resulted in a familiar pattern of economic blockades and political violence, and are only the beginning of many more possible claims. Political violence has continued to simmer in the Terai. The wounds of the People’s War will take a long time to heal. Over 1000 Nepalis remain unaccounted for, victims of political ‘disappearance’ or simple murder and finding justice for these crimes may prove elusive.

Moreover, after 40 years and over US$4 billion in aid (60% of its development budget) Nepal has remained one of the world’s poorest countries, with seven million Nepalis lacking adequate food or basic health and education. Nepal has one of the lowest health spending levels and the third-highest infant mortality rate in the world. The majority of Nepalis have continued stoically with their rural lives but until the government delivers on real social change and economic development in the countryside, the frustrations that fuelled Nepal’s recent political violence will remain unresolved.

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