Forest management policies in Nepal have undergone considerable change in recent decades. The main thrust of the current forest management policy is the handing‐over of control and responsibility for the management of forests to local people. In this paper it is argued that the ideas of the current policy are not new. Local communities have their own traditional forest management systems that vary slightly by region and ethnicity. The hand‐over of government controlled forests to local communities was also in practice a century ago. Thus, the current policy, best articulated in the Master Plan for the Forestry Sector, is essentially what was in operation in the past. It is recommended that while formulating forest management policies it is essential to understand the lessons of the past.