The name of the country Nepal itself derives from the Newars. Newars are the indigenous peoples of the Kathmandu Valley. They are also found in the neighboring hill settlements as well as in the towns and cities of the Terai plains. Originally Buddhists, Newars have increasingly become syncretic, and now a days some Newars practice both Buddhism as well as Hinduism. They are prominent in business, agriculture and craftsmanship. Their population, according to Census 2001, is 1,245,232.

Newars have their own language, called Nepal Bhasha, which belongs to the Tibeto-Burman family. The Newar language has incorporated the rich corpus of Newar literature from historical times. Newars are considered a highly developed nation state of many communities. They have a hierarchical clan system patterned after their respective occupations.