Records mention the Gopalas and Mahishapalas believed to have been the earliest rulers with their capital at Matatirtha, the south-west corner of the Kathmandu Valley. From the 7th or 8th Century B.C. the Kirantis are said to have ruled the valley. Their famous King Yalumber is even mentioned in the epic, Mahabharat. Around 300 A.D. the Lichhavis arrived from northern India and overthrew the Kirantis.
One of the legacies of the Lichhavis is the Changu Narayan Temple near Bhaktapur, a UNESCO World Heritage Site (Culture), which dates back to the 5th Century. In the early 7th Century, Amshuvarma, the first Thakuri king took over the throne from his father-in-law who was a Lichhavi. He married off his daughter Bhrikuti to the famous Tibetan King Tsong Tsen Gampo thus establishing good relations with Tibet. The Lichhavis brought art and architecture to the valley but the golden age of creativity arrived in 1200 A.D with the Mallas.
During their 550 year rule, the Mallas built numerous temples and splendid palaces with picturesque squares. It was also during their rule that society and the cities became well organized; religious festivals were introduced and literature, music and art were encouraged. After the death of Yaksha Malla, the valley was divided into three kingdoms: Kathmandu (Kantipur), Bhaktapur (Bhadgaon) and Patan (Lalitpur). Around this time, the Nepal as we know it today was divided into about 46 independent principalities. One among these was the kingdom of Gorkha with a Shah ruler. Much of Kathmandu Valleys history around this time was recorded by Capuchin friars who lived in the valley on their way in and out of Tibet.
An ambitious Gorkha King named Prithvi Narayan Shah embarked on a conquering mission that led to the defeat of all the kingdoms in the valley (including Kirtipur which was an independent state) by 1769. Instead of annexing the newly acquired states to his kingdom of Gorkha, Prithvi Narayan decided to move his capital to Kathmandu establishing the Shah dynasty which ruled unified Nepal from 1769 to 2008.
The history of the Gorkha state goes back to 1559 when Dravya Shah established a kingdom in an area chiefly inhabited by Magars. During the 17th and early 18thcenturies, Gorkha continued a slow expansion, conquering various states while forging alliances with others. Prithvi Narayan dedicated himself at an early age to the conquest of the Kathmandu Valley. Recognizing the threat of the British ruled India, he dismissed European missionaries from the country and for more than a century, Nepal remained in isolation.
During the mid-19th Century Jung Bahadur Rana became Nepals first prime minister to wield absolute power relegating the Shah King to mere figureheads. He started a hereditary reign of the Rana Prime Ministers that lasted for 104 years. The Ranas were overthrown in a democracy movement of the early 1950s with support from monarchy of Nepal, King Tribhuvan. Soon after the overthrow of the Ranas, King Tribhuvan was reinstated as the Head of the State. In early 1959, Tribhuvans son King Mahendra issued a new constitution, and the first democratic elections for a national parliament were held. The Nepali Congress Party was victorious and their leader, Bishweshwar Prasad Koirala formed a government and served as prime minister. But by 1960, King Mahendra had changed his mind and dissolved Parliament, dismissing the first democratic government.
After many years of struggle when the political parties were banned, they finally mustered enough courage to start a Peoples Movement in 1990. Paving way for democracy, the then-King Birendra accepted constitutional reforms and established a multiparty parliament with King as the Head of State and an executive Prime Minister. In May 1991, Nepal held its first parliamentary elections. In February 1996, the Maoist parties declared Peoples War against monarchy and the elected government.
Then on 1st June 2001, a horrific tragedy wiped out the entire royal family including King Birendra and Queen Aishwarya with many of their closest relatives. With only King Birendras brother, Gyanendra and his family surviving, he was crowned the king. King Gyanendra abided by the elected government for some time and then dismissed the elected Parliament to wield absolute power. In April 2006, another Peoples Movement was launched jointly by the democratic parties focusing most energy in Kathmandu which led to a 19-day curfew.
Eventually, King Gyanendra relinquished his power and reinstated the Parliament. On November 21, 2006, Prime Minister Girija Prasad Koirala and Maoist chairman Prachanda signed the Comprehensive Peace Agreement (CPA) 2006, committing to democracy and peace for the progress of the country and people. A Constituent Assembly election was held on April 10, 2008. On May 28, 2008, the newly elected Constituent Assembly declared Nepal a Federal Democratic Republic, abolishing the 240 year-old monarchy. Nepal today has a President as Head of State and a Prime Minister heading the Government.