By the 4th cent. A.D., Buddhism was replaced by Hinduism, brought by the Licchavis, who invaded from northern India and overthrew the last Kirati king. The Hindus brought with them the caste system which still prevails. By 879, the Licchavi era had ended and was succeeded by the Thakuri dynasty. The Thakuri's first king, Arideva, founded the Malla dynasty.

Although the centuries that followed were politically troubled, the very location of the Kathmandu Valley ensured its survival and growth.

Although a Newar dynasty, the Mallas, ruled the valley from the 14th–18th cent., there were internecine quarrels among local rulers. These were exploited by the Gurkha king Prithur Narayan Shah, who conquered the Katmandu valley in 1768. Also in 1792, Nepal first entered into treaty relations with Great Britain.

In 1846, with the rise to political dominance of the Rana family, the struggle for power among the Nepalese nobility culminated. Jung Bahadur Rana established a line of hereditary prime ministers, who controlled the government until 1950.

Relations with Britain were cordial, however, and in 1923 a British-Nepalese treaty expressly affirmed Nepal's full sovereignty. Nepal supplied many troops for the British army in both world wars. In 1948, the British withdrew from India and with them went the Ranas' chief support. 

The newly formed Congress party of Nepal precipitated a revolt in 1950 that forced the autocratic Ranas to share power in a new cabinet. King Tribhuvan was appointed ruler in 1951 and made a government that comprised of Ranas and members of the newly formed Nepali Congress Party. But the compromise was did not last long. King Mahendra (Tribhuvan's son and successor) decided that a 'partyless' panchaayat system would be more appropriate for Nepal.  He dissolved parliament, detained many political leaders, and in 1962 inaugurated a system of “basic democracy”,  Political parties were banned, and the king was advised by a council of appointed ministers. Crown Prince Birenda succeeded to the throne (1972) upon his father's death, like previous Nepalese monarchs, he married a member of the Rana family in order to ensure political peace. The changeover to democracy proceeded in an orderly, fashion, and in May 1991 the Nepali Congress Party and the Communist Party of Nepal shared most of the votes. 

King Mahendra died in 1972 and was succeeded by his son, King Birendra.  Multi-party democracy was re-established in 1991.

In 2001 June, the ruling monarch, the queen and their children were among the 11 dead in the aftermath of an alleged drugs and drinks induced frenzy that caused the crown prince to loose his control, and shot  several members of the royal family at a family dinner hosted by him. The people of Nepal were grief-stricken and broke out in street demonstrations, unable to believe either that their much loved King Birendra, revered as god, was dead, and even less able to believe that the deed was done by the  crown prince Dipendra's.  The throne is now occupied by the only remaining son of King Mahendra, King Gyanendra Bir Bikram Shah Dev is now the king of Nepal. His son Paras has been named the Crown Prince.