Guru Rinpoche, regarded as the second Buddha, is the most important figure in Bhutan's history.  His miraculous powers included the ability to subdue demons and evil spirits, and he preserved his teachings and wisdom by concealing them in the form of Terma to be found later by enlightened treasure discoverers known as Tertonpa.  One of the best known of these Tertonpa was Pema Lingpa; the texts and artifacts he found, the religious dances he composed, and the art he produced, are vital parts of Bhutan's living heritage.

Before the 16^th century, numerous clans and noble families ruled in different valleys throughout Bhutan. This changed in 1616 with the arrival of Ngawang Namgyal, a monk of the Drukpa Kagyu school of Buddhism from Tibet.  He taught throughout the region and soon established himself as the religious ruler of Bhutan with the title Shabdrung Rinpoche.  He repelled attacks from rival lamas and Tibetan forces and transformed the southern valleys into a unified country called Druk Yul, or Land of the Thunder Dragon.  While the political system he established lasted until the beginning of the 20^th century, the announcement of the Zhabdrung's death in 1705 was followed by 200 years of internal conflict and political infighting.

Instability lasted until 1907, when Ugyen Wangchuck was elected, by a unanimous vote of Bhutan's chiefs and principal lamas, as hereditary ruler of Bhutan.  Thus the first king was crowned and the Wangchuck dynasty began.  Over the following four decades, he and his heir, King Jigme Wangchuck, brought the entire country under the monarchy's direct control.  Upon independence in 1947, India recognized Bhutan as a sovereign country.

The third king, Jigme Dorji Wangchuck, is regarded as the father of modern Bhutan because of the development plans he initiated.  In 1958 he abolished slavery.  When China took control of Tibet, Bhutan's policy of total isolation lost its appeal and the country was formally admitted to the United Nations in 1971.  The present monarch, Jigme Singye Wangchuck, has continued the policy of controlled development with particular focus on the preservation of the environment and Bhutan's unique culture.  Among his ideals is economic self-reliance and what he has termed ‘Gross National Happiness’.

His coronation was on 2 June 1974.  The first group of paying tourists arrived later that year. 

Traditionally, Lyonpos (members of the Council of Ministers) were appointed by the King for five-year terms.  Lyonpos were usually reappointed and an unrivalled political stability in the last two decades has enabled Bhutan to progress steadily with its policy of controlled modernization.  Lyonpo Dawa Tshering holds a place in the Guinness Book of Records as the world’s longest serving foreign minister (1972 – 1998).

During major political reform in June 1998, the King dissolved the Council of Ministers and announced that ministers formerly appointed by him would need to stand for open election.  A rotating chairman fronts the resultant cabinet.

(Source : Lonelyplanet)