During the middle of the 18th Century, there were about 500 small states in India and about 50 states in Nepal. The situation was completely chaotic in the sense that most of them were fighting each other to expand their territory. And then along comes Prithvi Narayan Shah from the state of Gorkha (home of the now famous Gurkha soldier), about 100 km west of Kathmandu. He believed that unless Nepal was unified, it was in danger of going into the hands of British India. He started the process by unifying the small states. In 1768, after ten years of preparation, siege, and attack, Kathmandu fell to Gorkha on the day of the festival of Indra and the Virgin Goddess. Prithvi Narayan died in 1775 and was succeeded by his son Bahadur Shah. The new Shah rulers, transferring their seat of power to Kathmandu after its conquest, undertook to expand and consolidate their territory. But in 1790, their troops met Chinese resistance while marching to Tibet, then a vassal of China. The 70,000 Chinese troops pushed the Gorkhas back into Nepal and defeat. The treaty stipulated that Nepal send the Chinese emperor a tribute every five years. This was done all the way up to 1912.
Down South, Nepal was expanding its territory into India. By 1810, the kingdom extended from Kashmir to Sikkim and was double its present size. Confrontations led to a two-year war with the British between 1814-1816. Nepal was defeated and the Sugauli Treaty was signed in 1816, under which Nepal lost one-third of its territory. Another stipulation was that a British citizen reside in Kathmandu, bringing great resentment from the Nepalese. The borders were subsequently closed to foreigners, not to be reopened until 1951 The British resident and his successors were the only aliens within Nepalís frontiers for well over a century.
The prime minister, Bhimsen Thapa, suffered humiliation from this defeat and was arrested and locked up and committed suicide in 1839. The period between 1836-1846 was marked with confusion and intrigues. Pandays, Basnyats, and Kunwars were all fighting each other for power. In 1846, Jung Bahadur Rana had himself designated prime minister and later "Maharajah" with powers superior to those of the king. He established an oligarchy which would last 104 years. The country was kept in isolation and the people were deprived of political and social rights. Enemies were assassinated or persecuted and the power structure and state moneys were directed solely to the self interest of the Ranas. The King was there but he was kept under complete control of the Ranas. In 1850, Jung Bahadur visited England and France bringing back ideas with him. One prime minister reformed the forced labor system, another started a college and started a newspaper but altogether much more harm than good was done.
After World War II, many changes were taking place. Colonies were gaining independence, particularly India from Great Britain. The Communists of China invaded Tibet, forcing many refugees to flee to Nepal and India.
A "liberal" Rana prime minister proposed a new constitution offering a measure of peopleís participation through an administrative system known as panchayat. Village elders would solve problems locally with leaders elected to a national panchayat. But this new idea was soon undone by a successor.
With the support of the Indian Congress Party, opponents of the Rana rule - including some prominent Ranas - joined the Nepali Congress Party under the leadership of B.P. Koirala. The rightful sovereign of Nepal, King Tribhuvan, still powerless in his palace, was heralded as the embodiment of the democratic aspirations of the people.
In November 1950, the King fled to India under the pretense of going hunting. The "freedom fighters" of Nepal fought the Ranas, setting up bases in the Terai. As their was no decisive victor, India presided over a compromise. The King returned from India and soon thereafter, the Ranas went to live in India.
The period between 1951-1959 passed with uncertainty as the King did not comply with his promise of holding elections for the constituent assembly. Finally, only under pressure from the parties, King Mahendra (son of King Tribhuvan) declared elections for the parliament in 1959.
The Nepali Congress surprisingly won a majority of the seats in the new parliament. This led the King to fear he would be reduced to a ceremonial role and thus, on December 15, 1960 declared foreign politics were not for him and had the Nepali Congress put under arrest. He would have direct rule. Two years later, he started the panchayat system. The local five-man panchayat would send representatives to the district which would send others to the national panchayat. But this body had few real powers.
Under the "Panchayat Democracy"
There were times of agitations against the regime of the King but they were not successful. King Mahendra died in 1972 and was succeeded by his son, Birendra. In 1980, there was large scale discontent from the people with much violence. The King called for a referendum, with the choices between the Panchayat System and the multi-party Democracy. It was largely believed that vote-rigging occurred in favor of the Panchayat victory. The situation became even more suppressive afterwards.
In 1989, a trade impasse erupted with India. India blockaded 17 of the 19 entry points. This led to much discontent from which the opposition parties capitalized. The Nepali Congress, with support of the Communists, launched a mass movement against the Panchayat system. It was successful in mobilizing people from all walks of life. Two aspects were unprecedented in this movement. One was the alliance of the Nepali Congress with the Communists. The second was the international support for the movement.
After the change, the interior government headed by the Nepali Congress leader Krishna Prasad Bhattarai was formed. The tasks of the government included framing the constitution and holding a general election for Parliament.
Today, the Nepali Congress and United Marxists/Leninists are the two main parties that make up the government. The King, however, reserves the right to name one-fifth of the members of the legislature and continues as a strong monarchy.