The country is in the process of an enormous transformation. Nepalese society, historically organized as hierarchical and feudal, has experienced 10 years of armed conflict (February 1996 to November 2006), a conflict stimulating the quest for access to development, questioning traditional power relations and practices of social exclusion. Further, people’s uprising of April 2006 and the subsequent change process has brought fundamental transformation and opened new avenues for Nepal to move towards an open, inclusive and liberal democracy, and peace and prosperity. However, institutionalization of these achievements requires sound livelihood security for the Nepalese people, which is still a tremendous challenge and requires to initiate an inclusive development process, respect of rules of law, governance principles and responsibility and accountability provisions. Hence, a proper analysis of the livelihood complexity of the poor and of the structural and proximate causes of livelihood insecurity is a precondition for addressing these challenges, and necessary to strengthen achievements made so far and guide the change process in a positive and sustainable direction. The roles of old established institutions (like the caste system and the monarchy), social norms and values legitimatizing exclusion and discrimination and enforcing unbalanced power relations, and how they are challenged by new actors, which has created enormous social conflict and unrest. In this book, these dimension as well as basic causes of livelihood insecurity and social tension and conflict in Nepal are documented and analyzed and possible ways of addressing these challenges envisioned.