Background The modern concept of federalism owes much to the promulgation of the United States Constitution without using the word ‘federal’ or ‘federalism’. Early scholars defined federalism as an ‘association of states operating within their rights and jurisdiction such that the power is divided between a ‘general government’ that is independent of the governments of the associated states and ‘state governments’ that are independent of the general government (Wheare, 1980). Others have defined federalism as a combination of self-rule and shared rule among various groups in such a way as to provide for achieving common ends while maintaining respective integrities of all parties (Elazar, 1987). Federalism is thus a combination of self-rule for some purposes and shared-rule for others purposes co-existing within a single political system. The federal system addresses problem of discrimination and inequality by promoting collaboration between various tiers of governments based on mutual agreed provisions. In this sense, federalism does not merely mean autonomy; it also means collaboration between various tiers of government as the central structure is built in proportional or equal participation of all the provinces. Federalism has been practised as a system that guarantees freedom, equality, prosperity and human rights and cures the problems inequality and imbalance (Bhattachan, 2003). Diversity within the country is the main foundation of federalism. Countries big or small, rich or poor have embraced a federal model. Only 25 countries in the world have adopted a federal system . In terms of population and geographical area, though, about 40 percent of the globe is covered by federal system. The election to the constituent assembly in 2008 and the subsequent committee formed worked to get the voices of common citizens along with experts to frame the constitution. The overall intent was to build state along ethnic, linguistic, cultural attributes of the country by keeping Nepal’s national sovereignty and independence intact. In order to make the process of constitution building systematic, the Constitution Assembly (CA) Rules 2008 formed various committees’ with elected parliamentarians of the Constituent Assembly as members. The committees included one constitutional committee, ten thematic committees, and three procedural committees (CA, 2008). Thematic committees adopted established practices to organize discourse of constitutional agendas and make the draft for discussions. Each thematic committee worked on its own terms of reference, and prepared concept papers and drafted constitutional provisions of the concerned subjects, and finalized reports based on the concept papers and preliminary drafts (International IDEA, 2015). One of the important committee formed was the Committee for State Restructure and Division of State Power. It was formed in December 2008 following clause 66 of the Constitution Assembly Rules 2008 which has also defined its scope of work. The committee had 43 members of parliament and it was headed by Lokendra Bista Magar. The committee on state restructuring proposed proportionate participation and rights of all people belonging to different ethnicities, regions, genders and communities in the state organs. Recognizing existing structures may not address the concerns of the people belonging to some regional, ethnic and lingual communities, the committee proposed creating autonomous areas/regions, such that these regions exercise rights to self-rule and autonomous right as per the federal system of governance (Ghimire, 2012). Additionally, the committee also proposed concept of special areas to facilitate development of citizens which are outside of the mainstream of development in Nepal. The committee believed that the provision of special areas would ensure representation of groups which remained outside of mainstream of development endangered groups, and preserve their ways of living . The first election of the Constituent Assembly in 2008 elected 601 legislatures who also acted as parliamentarians. The election to the first constituent assembly opened up space for participation of groups/communities which have been historically marginalized from governance process in Nepal through proportional representation amounting to 60% of the total CA members (Sharma, 2014). The presence of these CA members from proportional representation was critical in deciding state restructure, form of governance and provisions related to autonomous and special regions along ethnic demands. These legislatures worked on various committees to prepare draft of the proposed constitution by taking views of citizens as well as experts. The reports submitted by various Constitutional Committees were debated in the parliament. Agreements were reached on many issues but large differences also existed mainly in three interrelated areas – forms of governance, election, and number and division of provinces among committee members. The disagreements delayed draft of the constitution despite extending the time for nearly 29 months after the first meeting of the constituent assembly. The dissolution of first constituent assembly on May 2012 (The Carter Center, 2013) was followed by announcement of fresh elections to the second constituent assembly in November 2013 with a deadline to promulgate a new constitution by January 22, 2015. However, due to continued differences on key issues including system of governance, judicial system and federation issues like number, name and areas of the states to be carved, the constitution could not be finalized and promulgated in time (International IDEA, 2015). Finally, on September 2015, the parliament of Nepal formally passed constitution of Federal Democratic republic of Nepal with landslide majority votes. The constitution of Nepal 2015 has elaborate procedure for the formation of province and local level governments.