Contemporary Nepal is undergoing an unprecedented phase of historic transition towards introducing a system of democratic and federal governance. Till 2007, unlike India and Pakistan, Nepal was centrally governed as a unitary state from Kathmandu. Following the success of the historic People’s Movement (Jana-Andolan II) in April 2006 and the Madhes uprising in January-February 2007, Nepal decided to transform the present unitary state into a federal one. The February 28, 2007 Agreement between Nepal’s interim government and agitating Madhesi1 groups makes clear that ‘Nepal will become a federal democratic republic state’, in which ‘states will be fully autonomous and empowered’ (Kathmandu Post, 29 February 2007).