Although Nepal remains divided on whether to keep its 238-year-old institution of monarchy or trade it for a Republic in 2007, King Gyanendra undoubtedly dominated 2006, despite his ouster as head of government early this year.
The 60-year-old, who grabbed the headlines worldwide in February 2005 by seizing power with an impeccably planned bloodless coup, continued to do so all through 2006, with events indicating the same trend in the coming year as well.
Ironically, the royal regime began unraveling from February, after the king had completed one year in total power.
Gyanendra, who ruled with the help of a coterie and an army of astrologers ignoring public opinion at home and abroad, paid a heavy price for going ahead with elections in February despite immense opposition.
Over 90 percent of the kingdom's parties did not take part, voters stayed away and nominations were filed for less than a third of the posts. But the king's insistence on going ahead with the exercise triggered violence as never before, with Maoist guerrillas stepping up attacks on security camps, targeting contestants and calling a week-long shutdown to disrupt the polls.
When the adamant king refused to read the writing on the wall and publicly announcing that he would next hold general elections, the wave of anti-monarchy sentiment sweeping the kingdom united the Maoist guerrillas, the major opposition parties and the people, who in April began an unprecedented peaceful protest against the royal government.
After 19 days of continuous demonstrations on streets, when protesters defied arrests, curfew and shoot at sight orders, Gyanendra was forced to restore the House of Representatives, the lower house of parliament dissolved in 2002, and hand over power to a multi-party government headed by opposition leader Girija Prasad Koirala.
Responding to the change, the Maoists called a ceasefire and began peace talks with the new government. Both sides agreed to hold an election by June 2007, when voters would choose between monarchy and Republic and signed a pact asking the UN to monitor the arms and armies of both sides and to ensure that the election is free and fair.
As a step towards the election, they have also agreed to implement a new constitution, which will replace the king as head of state with the honor given to the prime minister.
Since it was re-convened in May, the House of Representatives has issued a series of changes, stripping the king of his powers. With their legal and tax immunity revoked, the king and crown prince Paras were made to pay customs duty on imported articles at the fag end of the year, making it the first time that the Shah dynasty of kings paid taxes.
Efforts are also on to nationalize the king's excess land and take away the property he inherited from his slain brother King Birendra. The army and national carrier were renamed to drop the "royal" tag and distance them from the palace. Even the national anthem and coat of arms were scrapped for extolling the royal family.
In the coming year, the Maoist guerillas are expected to join the government, completing the circle from outlaws to a legitimate political force.
Besides the political developments, there have been a series of important social changes as well.
From the world's only Hindu kingdom, Nepal became a secular country where conversions will no longer be a punishable offence. Measures have also begun to give greater rights to women, regarded as the second sex in Nepal's feudal society despite comprising more than 51 percent of the population.
Although many of the rights are yet to be implemented, women now have the power to confer citizenship to their children, a right earlier enjoyed by men alone, do not need their husbands' consent to acquire a passport and can't be divorced on the ground of infertility. In the royal family, the first born will now be the royal heir, irrespective of sex.
Nepal also saw greater tolerance towards gays after the king's ouster, with the first same sex marriage in public taking place without coming under any attack.
2006 also saw Nepal's relations improving with India. Prime Minister Girija Prasad Koirala chose New Delhi to be his first port of call abroad after assuming office. At the end of the year, Indian External Affairs Minister Pranab Mukherjee visited Kathmandu. The Indo-Nepal transit treaty was signed for another seven years and India, on Nepal's request, waived an additional duty on Nepali exports.
The Maoists acknowledged India's contribution in Nepal's peace process and Maoist chief Prachanda attended a conference in the Indian capital, where he was the cynosure of the media.
However, Nepal suffered losses in the areas of sports and wildlife conservation.
Nepal's gold medal winner marathon runner Rajendra Bhandari tested positive for a banned steroid while a helicopter crash in northern Nepal, which killed all 24 people abroad, saw leading conservationists among the victims.
Though there were spurts of violence at the end of the year, still, all in all, there was hope at the end and anticipation of lasting peace and progress.