Nepal is a multinational, multilingual, democratic, independent, indivisible, sovereign, Hindu constitutional monarchy. The Constitution of 1990 is in force.

Administratively, it is divided into 5 development regions (Eastern, Central, Western, Mid-Western and Far-Western), which, in turn, are subdivided into 14 zones (anchol): Bagmati, Bheri, Dhavalagiri, Gandaki, Janakpur, Karnali, Kosi, Lumbini, Mahakali, Swords, Narayani, Rapti, Sagarmatha, Seti, and they are divided into 75 districts.

The largest cities (2001, thousand people): Kathmandu, Biratnagar (167), Lalitpur (163), Pokhara (156), Birganj (112).

The form of government is a constitutional monarchy. The King is the head of state and commander-in-chief of the Armed Forces. It can introduce a state of emergency in the country and take full power into its own hands (however, the House of Representatives is endowed with the right to cancel the state of emergency 2/3 of the votes). Criticism of the actions of the king, queen and heir is not permitted. The king cannot be sued. It is officially proclaimed a symbol of the unity of the Nepalese nation. His income and property are not subject to any taxes.

The bicameral model of parliament, the highest legislative body: the upper house (National Assembly) consists of 60 members, the lower house (house of representatives) – of 205. 35 members of the upper house are elected by the lower house, 15 represent the regions, 10 are appointed by the king. Elections to the lower house are held on the basis of universal, equal and direct suffrage by secret ballot. The right to vote is granted to all citizens who have reached the age of 18. The head of the upper chamber is the chairman, the lower one is the speaker, whose powers are very limited. Laws must be passed by both chambers (with the exception of financial laws, which are only considered by the lower house). All legislation on finance, taxation, budget, army and police activities require the approval of the king. The term of office of the members of the upper chamber is 6 years, the lower one – 5 years.

Executive power is divided between the king and the government (Council of Ministers), accountable to the House of Representatives. The Prime Minister is the leader of the party that won the majority of seats in the elections (he must be a member of the lower house). In the absence of an absolute majority, a party leader is appointed who can secure the support of parliamentarians. The king, on the recommendation of the prime minister, appoints ministers, usually from among the members of parliament.

The independence of the three-tiered judiciary is declared, consisting of the Supreme Court, the courts of appeal and the district courts.

There are 75 district development committees, 58 municipalities and 3,913 village development committees, acting as legislative and executive bodies. Municipalities and village development committees are directly elected and their members are elected by district development committees. Under the decentralization policy, local authorities have many rights and responsibilities (for example, they are responsible for primary education, health care, agricultural development programs, irrigation, etc.). Most of the committees, lacking a sufficient financial base, depend on grants from the central government.

There is a multi-party system. The constitution prohibits the activities of political organizations calling for the introduction of a one-party system. In the last elections, the main success was achieved by the NK, which occupies centrist positions (1999 – 37.3% of the vote, 111 seats, 1994 – 83 seats) and the NKP (OML), which received 31.6% of the vote and 71 places). The third place is taken by the conservative National Democratic Party, headed by S. B. Thapoi (1999 – 10.4% of the vote and 11 seats, 1994 – 20 seats). There are dozens of left and center parties, many parties based on ethnicity. In 2002, parliament was dissolved before new elections.

The main organization of business circles is the Federation of Chambers of Commerce and Industry of Nepal, which unites hundreds of chambers and companies of various levels. Nepal is a member of the International Chamber of Commerce, the Asia-Pacific Chamber of Commerce and Industry, and the Chambers of Commerce and Industry of the SAARC member countries. There are hundreds of civil society organizations that are particularly active in the field of human rights, the environment and health. Many international non-governmental organizations are active.

In the field of foreign policy for Nepal, located between India and China, relations with them have always played a major role. Nepal was forced to balance between its neighbors, there were constant ups and downs in bilateral relations. The cultural and ideological closeness of India and Nepal contributes to the existence of extremely close relationships between the two countries. At the same time, this often leads to some complications. Nepal maintains a more even relationship with China. Nepal is a founding member of the Non-Aligned Movement and a participant in all conferences of non-aligned countries. A significant role is assigned to the activities of SAARC. As one of the poorest Asian states, Nepal is interested in receiving gratuitous aid from developed countries. Its main donors, in addition to its neighbors, are Japan and the United States.

The Armed Forces consist almost entirely of the Ground Forces. The total number is 50 thousand (a 2-fold increase in comparison with 1985). Defense spending (US $ 50 million, 2001) has not increased in relative terms and amounted to 0.9% of GDP in 1990 and 2000. The main unit of the army is the brigade. Nepal has been actively involved in UN peacekeeping operations since 1958. 40,000 soldiers have taken part in 28 operations since then. The Gurkhas continue to serve in the British army.

Nepal has diplomatic relations with the Russian Federation (established with the USSR in 1956).