During the current decade Nepal has experienced a complex political change process accompanied by disharmony, communal tension, and social mistrust. However, to date there has been no critical analysis of ethnicism and societal militarism and their effects on the political transformation process. Hence, this article examines the process of the emergence of exclusive ethnicism and societal militarism and their effects on Nepali society. The strategy of the Communist Party of Nepal Maoist to garner support of ethnic communities, and their tactics to mobilize the youth for electoral and political gain, were the main reasons for advancement of exclusive ethnicism and societal militarism in Nepal. If the current approach does not change it is highly likely that communal and ethnic violence will continue.