The Bhutanese name for Bhutan, Druk Yul, means 'Land of the Thunder Dragon'. Existing archives trace Bhutanese history back to AD450, although many of the intervening events remain a mystery. Guru Rinpoche is believed to have brought Mahayana Buddhism to Bhutan from Tibet in the eighth century. Bhutan, which first became a coherent political entity around the 17th century, has never been conquered or ruled by another foreign power.

Trade agreements with India, essential to sustain the Bhutanese economy, have been the subject of regular rounds of negotiation since the 1940s. Yet despite its close relations with Delhi, Bhutan has occasionally switched its support to its other great neighbour, China. Over the years, relations with China have been dominated by the issue of Tibet – thousands of refugees entered Bhutan after the Chinese occupation of Tibet in 1959; the country has since become a centre for Tibetan exile politics.
The refugee issue also dominates relations with Bhutan’s other neighbour, Nepal, which hosts an estimated 100,000 Bhutanese refugees housed in camps in the east of the country. Most are ethnic Nepalis whose citizenship is in dispute. (The Bhutanese population is divided between two main ethnic groups – the Nepalis and the Drupka.) The Nepali government wants them to return to Bhutan; the Bhutanese refuse to take them.

The Kingdom of Bhutan has adopted a very cautious approach to tourism in an effort to avoid the negative impact of tourism on the country’s culture and environment. All tourists must travel on a pre-planned, pre-paid, guided package tour through one of the 120 registered tour operators in Bhutan or their counterparts abroad. The rate is fixed and controlled by the government. There are still plenty of takers wanting to explore the breathtaking terrain of this astonishing country: the world's last Buddhist kingdom. The Royal Government of Bhutan adheres strongly to a policy of low-impact/volume, high-value tourism. The tourism industry in Bhutan is founded on the principle of sustainability, meaning that tourism must be environmentally and ecologically friendly, socially and culturally acceptable and economically viable. The number of tourists visiting Bhutan is also regulated to a manageable level because of the lack of infrastructure.