Although Nepal emerged in history in the first millennium BC, it was only in the 18th century that Nepal developed as a country of the present size. Archaeological remains suggest that areas of Nepal have been inhabited for more than 10,000 years.Nepal's recorded history began with the Kiratis, who arrived in the 7th or 8th century BC from the east. Little is known about them, other than their deftness as sheep farmers and fondness for carrying long knives. It was during this period that Buddhism first came to the country; indeed it is claimed that Buddha and his disciple Ananda visited the Kathmandu Valley and stayed for a time in Patan. By 200 AD, Buddhism had waned, and was replaced by Hinduism, brought by the Licchavis, who invaded from northern India and overthrew the last Kirati king. The Hindus also introduced the caste system (which still continues today) and ushered in a classical age of Nepalese art and architecture. The Vamshavalis or chronicles, the oldest of which was written during the 14th century, are the only fairly reliable basis for Nepal's ancient history. The Vamshavalis mention the rule of several dynasties the Gopalas, the Abhiras and the Kiratas -- over a stretch of centuries. However, no extant historical evidence has yet authenticated the rule of these legendary dynasties. The documented history of Nepal begins with the Changu Narayan temple inscription of King Manadeva I (C 464-505 A.D.) of the Lichavi dynasty.

Lichavi Dynasty

The Lichavis are said to have migrated into Nepal from north India in around 250 A.D. The first Lichavi king of historical importance was Manadeva 1. Another important Lichavi monarch was Anshuverma who opened trade routes to Tibet. One of his daughters, Bhrikuti, who was married to Tibetan ruler Tsrong-tsong Gompo, was instrumental in spreading the Gospel of the Buddha in Tibet and China. Anshuverma has been referred to as a man of many talents in the accounts of the Chinese traveler Huen Tsang, who had visited India in the 7th century AD.

Narendradeval another Lichavi king, initiated friendly relations with China and his successors laid the foundations of friendship with India by entering into matrimonial alliances with the Indian royal families. The Lichchhavi rule spanned over a period of about 630 years, the last ruler being Jayakamadeva.

Malla Dynasty

After the fall of the Lichchhavis came the Malla period during which the foundation of the city of Kantipur (later Kathmandu) was laid. The early Malla rule started with Ari Malla in the 12th century and over the next two centuries grew into a large empire before disintegrating into small principalities which later became known as the Baisi (i.e. the twenty-two principalities). This was more or less coincidental with the emergence of the Chaubisi (i.e. twenty-four principalities). The history of these principalities remains shrouded up until the time when they joined other kingdoms, both large and small, to form the unified Kingdom of Nepal.

Jayasthiti Malla, with whom commences the later Malla period in the Kathmandu Valley, reigned towards the end of the 14th century. Though his rule was rather short, his place among the rulers in the Valley is eminent for the various social and economic reforms such as the 'Sanskritization' of the Valley people, new methods of land measurement and allocation etc. Yakshya Malla, the grandson of Jayasthiti Malla, ruled the Kathmandu Valley until almost the end of the 15th century. After his demise, the Valley was divided into three independent Valley kingdoms -- Kathmandu, Bhaktapur and Patan -- in about 1484 A.D. This division led the Malla rulers into internecine wars for territorial and commercial gains. Mutually debilitating wars gradually weakened them and by the time of King Prithvi Narayan ShahÕs invasion of the Valley, they had by themselves reached the brink of political extinction. The last rulers were Jaya Prakash Malla, Tej Narsingh Malla and Ranjit Malla of Kathmandu, Patan and Bhaktapur respectively.

Shah Dynasty, Unification of Nepal

Prithvi Narayan Shah (c 1769-1775), with whom we move into the modern period of Nepal's history, was the ninth generation descendant of Dravya Shah (1559-1570), the founder of the ruling house of Gorkha. Prithvi Narayan Shah succeeded his father King Nara Bhupal Shah to the throne of Gorkha in 1743 AD. King Prithvi Narayan Shah was quite aware of the political situation of the Valley kingdoms as well as of the Barsi and Chaubisi principalities. He foresaw the need for unifying the small principalities as an urgent condition for survival in the future and set him self to the task accordingly.

His assessment of the situation among the hill principalities was correct, and the principalities were subjugated fairly easily. King Prithvi Narayan Shah's victory march began with the conquest of Nuwakot, which lies between Kathmandu and Gorkha, in 1744. After Nuwakot, he occupied strategic points in the hills surrounding the Kathmandu Valley. The ValleyÕs communications with the outside world were thus cut off. The occupation of the Kuti Pass in about 1756 stopped the ValleyÕs trade with Tibet. Finally, King Prithvi Narayan Shah entered the Valley. After the victory of Kirtipur. King Jaya Prakash Malla of Kathmandu sought help from the British and so the East India Company sent a contingent of soldiers under Captain Kinloch in 1767. The British force was defeated at Sindhuli by King Prithvi Narayan ShahÕs army. This defeat of the British completely shattered the hopes of King Jaya Prakash Malla. The capture of Kathmandu (September 25. 1768) was dramatic. As the people of Kathmandu were celebrating the festival of Indrajatra, Prithvi Narayan Shah and his men marched into the city. A throne was put on the palace courtyard for the king of Kathmandu. Prithvi Narayan Shah sat on the throne and was hailed by the people as the king of Kathmandu. Jaya Prakash Malla managed to escape with his life and took asylum in Patan. When Patan was captured a few weeks later, both Jaya Prakash Malla and the king of Patan, Tej Narsingh Mallal took refuge in Bhaktapur, which was also captured after some time. Thus the Kathmandu Valley was conquered by King Prithvi Narayan Shah and Kathmandu became the capital of the modern Nepal by 1769.

King Prithvi Narayan Shah was successful in bringing together diverse religio-ethnic groups under one national. He was a true nationalist in his outlook and was in favor of adopting a closed-door policy with regard to the British. Not only his social and economic views guided the country's socio-economic course for a long time, his use of the imagery, 'a yam between two bouldersÕ in Nepal's geopolitical context, formed the principal guideline of the country`s foreign policy for future centuries.

In the first half of the 19th century, Nepal entered a short period of instability that culminated in the Kot Massacre, in which fighting broke out among military personnel and administrators after the assassination of a high-powered favorite of the queen. Jung Bahadur, a strong pro-British leader, prevailed during the massacre and seized control of the country. He declared himself prime minister and began the Rana line of rulers. The Rana rulers monopolized power by making the king a nominal figure. They also made the office of the prime minister hereditary. Nepal gave valuable assistance to the British during the Sepoy Rebellion (1857-1859) and during World War I (1914-1918). The British government reaffirmed the independence of Nepal through a treaty in 1923. A British resident (colonial official acting as an adviser to the ruler of a protected state), stationed in Kathmandu , controlled Nepal 's foreign relations. Nepal supported the Allied cause, with the contribution of Gurkha soldiers, during World War II (1939-1945). Nepal and the United States established diplomatic relations in 1948.

The Rana autocracy was increasingly criticized in the late 1940s, particularly by dissidents residing in India . The political-reform movement, which was approved by the Indian government and directed by the newly created Nepali Congress Party, won the support of King Bir Bikram Tribhuvana. Like his predecessors under the Ranas, he possessed purely nominal powers. His intervention in domestic politics deepened the crisis, however, and he was removed from the throne in 1950 by Prime Minister Maharaja Mohan Shumsher Rana. A few days later the king fled to India and Nepali Congress insurgents began military operations along the southern frontier. In 1951 Prime Minister Rana allowed a reorganization of the Nepalese government along democratic lines and the king was reinstalled. Friction between the Rana and Congress Party factions culminated in November 1951 when Prime Minister Rana was removed from power and the Congress Party formed a government headed by Matrika Prasad Koirala.

After the Rana autocracy ended, Nepal embarked on a mission of economic and social development. However, political parties organizing the government during the 1950s were not effective. King Mahendra, crowned in 1955, seized absolute control of the government in 1960 after a decade of political unrest. King Mahendra dismissed the government and suspended parliament, calling it corrupt and inefficient. Considering a parliamentary system unsuited to Nepal , the king proclaimed a new constitution in 1962 that banned the formation of political parties and allowed for the autocratic rule of the king through a nonparty system of councils, or panchayats . The government then instituted social reforms, including land reforms and modernization of the legal code, which helped alleviate some caste discrimination.

When the king died in 1972, he was succeeded by his son Birendra Bir Bikram, who was formally crowned in 1975. The young king initially exercised strong control over the government, attempting to repress the reform movement led by former Prime Minister Bisheswar Prasad Koirala. As anti monarchist sentiments grew in the late 1970s and serious riots challenged his authority, the king relaxed his control.

In a 1980 referendum on the form of government, the voters decided to retain the nonparty panchayat system with certain modifications. Elections under the new provisions were held in 1981 and 1986. After a wave of pro-democracy protests in early 1990, a new constitution providing for a multiparty system was adopted in 1990.

In 1991 the Nepali Congress Party (NCP) won the country's first democratic election in 32 years, and the party's general secretary, Girija Prasad Koirala, became prime minister. Koirala resigned in July 1994, and the king subsequently dissolved parliament and set new elections, in which the Communist Party of Nepal (Unified Marxist-Leninist), or CPN-UML, won the majority of seats. Man Mohan Adhikary was sworn in as prime minister. In 1996 the Communist government was dissolved by the parliament and Adhikary resigned his position under allegations of corruption. The king swore in Sher Bahadur Deuba of the NCP as prime minister. That same year, a radical leftist party called the Nepal Communist Party (Maoist), or NCP-M, unhappy with the pace and direction of change, launched a “people's war” aimed at overthrowing the government, abolishing the monarchy, and establishing a people's republic. Incidents of violence were at first confined to remote mountain regions but by the late 1990s had spread to more than half of the country.

Political stability remained out of reach, and in March 1997 Deuba unexpectedly lost a vote of confidence and was forced to resign. King Birendra then named Lokendra Bahadur Chand, a member of the pro-royal National Democratic Party (NDP), as prime minister; Chand was backed by a royalist-Communist parliamentary coalition in which the CPN-UML had the largest bloc of seats. Chand was forced to resign in October as the NDP split into two factions, one headed by Chand and the other by NDP president Surya Bahadur Thapa. Thapa was named prime minister later that month, heading a coalition government that excluded the CPN-UML. In March 1998 the CPN-UML split, with the smaller faction taking the name Communist Party of Nepal (Marxist-Leninist), or CPN-ML. The split left the NCP with the largest bloc in parliament. In April 1998 Thapa resigned, and Girija Prasad Koirala of the NCP again became prime minister. Koirala briefly won the support of the CPN-ML in a majority coalition, but when the party withdrew from the coalition in December, he was forced to resign. Koirala immediately was reappointed prime minister at the head of a center-left coalition that incorporated the CPN-UML. Parliamentary elections held in May 1999 ended the need for a coalition government by awarding a majority of seats to the NCP. The legislature elected Krishna Prasad Bhattarai, a former prime minister, to lead the government. Bhattarai stepped down in March 2000 and was replaced by former Prime Minister Girija Prasad Koirala.

In early June 2001 King Birendra and eight other members of the royal family, including Queen Aiswarya, were fatally shot in the royal palace in Kathmandu , allegedly at the hands of Crown Prince Dipendra, who then reportedly attempted suicide. Dipendra initially survived his gunshot wounds in a coma. His subsequent death officially made his uncle Gyanendra Bir Bikram Shah the new regent of Nepal . An official investigation of the massacre confirmed earlier reports that Dipendra had killed his family members in a drunken rage. The Maoist insurgency intensified following the massacre, fueled in part by unsubstantiated conspiracy theories surrounding the incident. Koirala, meanwhile, was widely criticized for embarrassing setbacks at the hands of the rebels and for a perceived failure to provide adequate protection for the royal family. His government was also mired in a bribery scandal involving the national airline.

Koirala stepped down in July amid demands for his resignation by several groups, including the CPN-ML, the main opposition party. Sher Bahadur Deuba, a former prime minister known for his willingness to work with opposition parties, was chosen by the ruling NCP to head Nepal's ninth government since 1990. Deuba announced his first priority would be to seek peace talks with the Maoist rebels.