Democracy is the most widely admired political system but the most difficult to maintain. There has been a greater urge for opening up the space for participation and competition in a state like Nepal which has a long history of monarchial domination. Since the fall of Rana’s authoritarian regime in 1951, democratic process has travelled from one partial and incomplete ‘revolution’ in 1951 to another in 1990. In the present study, an attempt has been made to analyse the circumstances and challenges which created hurdles in democratic process. In 1960, the Panchayat system under the direct control of king was established which continued for 30 years. Though there seems stability but people had no democratic rights. In 1990, due to the increasing demand for political reforms People’s Movement was started which brought an end to absolute monarchy and eliminated the Panchayat System. It was the beginning of constitutional democracy. Later, different groups and political parties having disputes with each other derailed the democratic process in the country for their own interests. In between, interim constitution 2007 was accepted and in the election of 2008 for Constituent Assembly-I, United Communist Party of Nepal emerged as the largest political party which abolished the 239 years old monarchial institution and declared Nepal a Republic. However, contrary to the expectation of a new constitution, political turmoil continued. Despite repeated extension, CA-I failed to draft a new constitution and was dissolved in May 2012. After the elections of CA-II, Nepali Congress leader Sushil Koirala became the Prime Minister on 11 February 2014. With his efforts finally the present constitution was promulgated on 20 September 2015 amid protests by Madhesis and the ethnic groups in southern lowland. The game of toppling and forming the government still dominates the national political scene which is evident by the change of the government on 3 August 2016. The frequent changes in the government have badly hampered the Nepal’s development and economic growth. Nepali democratic system is still facing several challenges. To strengthen democracy and diffuse political crisis, serious efforts have to be made by the political parties. They have to display maturity and flexibility to end different types of crisis through dialogue.