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The name Bhutan is derived from the Sanskrit word BhuUttahan means High Land. Another theory suggests that Bhutan refers to End of Tibet or South of Tibet. In ancient times, Bhutan has been called through many names, like Lho Mon ("Southern Land of Darkness"), Lho Tsendenjong ("Southern Land of the Sandalwood"), Lhomen Khazhi ("Southern Land of Four Approaches"), and Lho Men Jong ("Southern Land of Medicinal Herbs").

Humans started inhabiting Bhutan around 2000 BC. During 500 BC to 600 BC aboriginal people stayed here. The Tibetan Chronicles and Bhutanese Chronicles refer Bhutan as Lhomon Tsendenjong (Sandalwood Country), and Lhomon Khashi, or Southern Mon (country of four approaches).

The early history of Bhutan is not very clear, as almost all the records were burnt when a fire broke in Punakha, the ancient capital of Bhutan in 1827. Bhutan's early history has affect of Buddhism, Mongols, and Tibtens. Like many other countries Bhutan has also seen several wars and invasions. But with the passage of time, as the government and political reforms taken place world over, Bhutan also prepared itself to be a sovereign state.

This was 1907, when Ugyen Wangchuck chosen as hereditary king of Bhutan by an assembly of leading Buddhist monks, government officials, and heads of important families. In 1910, Bhutan signed a treaty with Great Britain, which allows Britain to Guide Bhutan's foreign affairs. The greatest impact of this treaty seems to be the perception that it meant Bhutan was not totally sovereign state.

Bhutan is the first country that recognized India's independence after British left India on August 15, 1947.

The government in Bhutan is absolute monarchy though gradually transforming into constitutional monarchy. The fourth king of Bhutan has created a 10 member ministerial council in 1999. The head of the state is King of Bhutan. The council of ministers has executive power. Legislative power is on the hands of government and national assembly. Now, the country is going to introduce full parliamentary democracy and thus to induce total reform by the year 2008.

The climate in Bhutan varies greatly with altitude, from subtropical in the south to temperate in the highlands and polar-type climate, with year-round snow, in the north.
Bhutan experiences five distinct seasons: summer, monsoon, autumn, winter and spring. Western Bhutan receives heavier monsoon rains; southern Bhutan has hot humid summers and cool winters; central and eastern Bhutan is temperate and drier than the west with warm summers and cool winters.

The economy of Bhutan largely depends on agriculture, forestry, and sale of hydroelectric power to India. Approximately, 80% Bhutanese people depend on agriculture for living. Agricultural produce includes rice, chilies, dairy (yak) products, buckwheat, barley, root crops, apples, and citrus and maize at lower elevations.
Making handicrafts and weaving are some other sources of income. The industrial sector is mainly cottage-industry type. Industries include cement, wood products, processed fruits, alcoholic beverages and calcium carbide. Most development projects, such as road construction, rely on Indian contract labor.

Bhutan is a mountainous country, building roads and highways here is a tough job. Though Government of India is planning to connect southern Bhutan through Indian Railway link.

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