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The two major religions practiced in Nepal are Hinduism and Buddhism with a majority of the people being Hindus. The two have co-existed through the ages and many Hindu idols are found within Buddhist shrines. Hindus visit Buddhist shrines and Buddhists visit Hindu temples without a second thought as many worship in both. Some gods and goddesses are shared by Hinduism and Buddhism although they have been given different names. The other religions practiced in Nepal are: Islam, Christianity, Jainism, Sikhism and Bon. Some of the earliest inhabitants like the Kirants practice their own kind of religion based on ancestor worship and the Tharus practice animism. Over the years, Hinduism and Buddhism have been influenced by these practices which have been modified to form a synthesis of newer beliefs.
Nepal was declared a secular country by Parliament on May 18, 2006.

The recorded history of Nepal is centered on the Kathmandu valley and begins with the Kirantis who are said to have ruled for many centuries beginning from the 7th or 8th Century B.C. with their famous King Yalumber who is even mentioned in the epic, ‘Mahabharata’. The Gopalas who were herdsmen are believed to have ruled before the Kirantis but little is known about them. Their descendants are said to still live at the edge of the valley. Around 300 A.D. the Lichavis arrived from northern India and overthrew the Kirantis. The descendants of the Kirantis are the Rais and Limbus who predominate in eastern Nepal. One of the legacies of the Lichavis is the fabulous Changu Narayan Temple near Bhaktapur which dates back to the 5th Century. In early 7th Century, Amshuvarman, the first Thakuri king took over the throne from his father-in-law who was a Lichavi. He married off his daughter Bhrikuti to the famous Tibetan King Tsong Tsen Gampo thus establishing good relations with Tibet. Bhrikuti went on to convert the king to Buddhism. The Lichavis brought art and architecture to the valley but the golden age of creativity arrived with the Mallas who came to power around 1200 A.D.

During their 550 year rule, the Mallas built an amazing number of temples and splendid palaces with picturesque squares that are lined with architecturally beautiful temples. 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. Sadly after the death of Yaksha Malla, the valley was divided into three kingdoms: Kathmandu (Kantipur), Bhaktapur (Bhadgaon) and Patan (Lalitpur). The rivalry among these kingdoms led to the building of grand palaces and the uplifting of the arts and culture. 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 king in power. Much of Kathmandu valley’s history around this time was recorded by Capuchin friars who lived here on their way in and out of Tibet.

Nepal, as a state, was established when 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 when the last Shah ruler, Gyanendra relinquished his power to make way for total democracy under the rule of a Prime Minister.

The history of the Gorkha state goes back to 1559 when Dravya Shah established a kingdom in an area chiefly inhabited by Magars. At this time the Kathmandu valley was ruled by the Malla kings. During the 17th and early 18th centuries, 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 Raj in 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 Nepal's first prime minister to wield absolute power relegating the Shah king to a mere figurehead. He started a hereditary reign of the Ranas that lasted for 104 years during which time the Shah kings had no real power. The Ranas were overthrown in a democracy movement of the early 1950s with support from an unlikely person, the monarch of Nepal, King Tribhuvan. Soon after the overthrow of the Ranas, King Tribhuvan was reinstated as the head of the state. In early 1959, Tribhuvan's son King Mahendra issued a new constitution, and the first democratic elections for a national assembly were held. The Nepali Congress Party was victorious and their leader, Bisheshwar 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 people's movement in 1990. With the public rising up against absolute monarchy and demanding democracy, the then ruler King Birendra accepted constitutional reforms and established a multiparty parliament with himself as head of state and the prime minister heading the government. In May 1991, Nepal held its first parliamentary elections. In February 1996, one of the Communist parties (Maoist wing) went underground to wage a people's war against monarchy and the elected government.

Then on June 1, 2001, a horrific tragedy wiped out the entire royal family along with many of their close relatives. With only King Birendra’s brother, Gyanendra and his family surviving, he was crowned the king. King Gyanendra tolerated the elected government for only a short while and then dismissed Parliament to grab absolute power. In April 2006, strikes and street protests in Kathmandu led to a 19-day curfew and the political parties joined forces with the Maoist rebels to bring pressure on the monarch. Eventually, King Gyanendra realized it was futile holding on to power and relented. He agreed to reinstate parliament. But the political parties and a majority of the general public had had enough of dynastic rule and their abuse of power. On May 28, 2008, a 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 Nepal Government.