Little is known of Bhutan’s early history. Archaeological evidence suggests that people may have lived in the area as early as 2000 bc. The state of Monyul is thought to have existed here between 500 bc and 600 ad. The people of Monyul practiced a shamanistic religion that emphasized the worship of nature and the existence of good and evil spirits. Buddhism was introduced into the area in the 7th century, and Buddhist chronicles provide a recorded history of Bhutan. Buddhist temples were built in Bumtang and Paro valleys. At this time there was no central government in the country; separate valleys were ruled by feudal lords. As Buddhism matured within Bhutan, it became a unifying element for the country.
By the 10th century, the monks of the Kargyupa sect of Mahayana Buddhism began to build dzongs (fortified monasteries) in the valleys of Bhutan. The Drukpa subsect of the Kargyupa sect spread through Bhutan and became a dominant religion. In 1616 the theocratic government of Bhutan was founded by a Drukpa monk, Ngawang Namgyal. After a series of victories over rival subsect leaders, Ngawang Namgyal became the leader of Bhutan. He was the first leader to unite the powerful Bhutanese families into one country. During Ngawang Namgyal’s rule, the administration of Bhutan developed a dual system of government including two leaders: a spiritual leader entitled dharma raja and a civil government leader entitled deb raja. The seat of the government was at Thimphu; the winter capital was at Punakha. This system of dual administration for spiritual and civil matters continued until 1907.
In 1774 the deb raja signed a treaty of peace with the English East India Company. In the 1870s and 1880s regional rivalry between the pro-British governor of Tongsa and the anti-British governor of Paro resulted in the rise of Ugyen Wangchuck, the governor of Tongsa. Ugyen Wangchuck defeated his rivals and united the country under his leadership. After the dharma raja died in 1903 and no suitable replacement (who must be determined to be the reincarnation of the dharma raja) was found until 1906, the dual system of government was abolished. In 1907 Ugyen Wangchuck was installed as the first hereditary druk gyalpo of Bhutan. He reigned between 1907 and 1926. He was succeeded by his son Jigme Wangchuck, who reigned from 1926 to 1952. The third druk gyalpo, Jigme Dorji Wangchuck, ruled from 1952 to 1972. During this period Bhutan began its program of modernization and development. Additionally, Jigme Dorji Wangchuck moved the capital of Bhutan to Thimphu year-round in order to increase efficiency. In 1972 the fourth druk gyalpo, Jigme Singye Wangchuck, began his rule.
In 1949 Bhutan and India signed a Treaty of Peace and Friendship to govern their mutual relations. The treaty recognizes Bhutan’s sovereignty, guarantees noninterference by India in the internal affairs of Bhutan, and provides for free trade between the two countries and duty-free transit of Bhutan’s imports across India.
Recent ethnic tensions in Bhutan have forced many Nepali who have lived in southwestern Bhutan for several decades to flee the country. Nearly 86,000 Nepali refugees from Bhutan lived in camps in eastern Nepal in the mid-1990s. Talks between Nepal and Bhutan about the Nepali migrants resumed in 1993 after several attempts to reach an agreement. Bhutan insists that the migrants are being incited to leave the country by small Nepali groups seeking a greater share in Bhutan’s political system. Underground political groups dominated by Nepali have launched a campaign to destabilize the prosperous southern districts in an attempt to gain greater power and privileges for the Nepali in Bhutan. In an effort to modernize Bhutan’s political system and reduce the role of the monarchy in its government, in 1998 King Wangchuk introduced a package of democratic reforms. Among other changes, the reforms granted power to the legislature to call, through a vote of no confidence, for the king’s abdication in favor of his successor.