The Rana rule collapsed due to the 1950 A.D. revolution. With the commencement of democratic polity in the country, attempts were made to shape the home administration according to the needs of the modern system. The functions of the Bada Hakim and the Magistrate were broadened. The Emergency Authority of the Bada Hakim,1951 ., The Kathmandu Valley Commissioner Magistrate Act, The Terai General Administration Act (Madhesh Goswara Ain), 1955, The General Administration Act ( for the hilly region) 1957 and such other regulations were formulated. Police Act, 1955  was  introduced .

According to the Interim Constitution of 1951 , a Council of Ministers was introduced and ten ministries were established. The Ministry of Home Affairs was created for the first time to look after the internal affairs of the country. Late Mr. B.P. Koirala is the first Home Minister of Nepal.

From 1951 A.D. to 1958 A.D., the country was divided into 35 districts for local governance. A Bada Hakim was appointed in Gadhi, Gaunda, Goswara (zonal and district level units). Three Magistrate offices were established in the Kathmandu valley. In 1956 A.D., the home administration was restructured. The whole country was divided into 7 regions, 32 districts and 74 sub-districts. After the general election in 1959 A.D., the Block Development Officers (BDOs) were appointed for rural development. Politically appointed District Development Officers (DDOs) of the respective districts were responsible to coordinate  the BDOs.

Home Administration from 1960 A.D. to 1990 A.D.

In 1960 A.D., the multi-party parliamentary system was replaced by the party less Panchayat polity. The Home administration was reorganized. The name of the Home Ministry was changed into the Ministry of Home and Panchayat Affairs. Besides internal security of the country, the Ministry was made responsible to look after the smooth functioning of the Panchayat system. In 1961 A.D., Nepal was classified into 14 zones and 75 districts. 14 Zonal Commissioners were appointed for the administration of each zones. The Local Administration Ordinance, 1965 A.D. defined the duties and responsibilities of the Zonal Commissioners and the Chief District Officers (CDOs). The Zonal Commissioners were appointed by the King and were responsible to the King . In the district, the CDO had to function as the office secretary to the District Panchayat as well. He had to conduct his business under the supervision and direction of the Zonal commissioner. The Local Administration Act, 1971 A.D. defined the powers and functions for the CDO. In 1972 A.D., the concept of regional development was introduced. The country was divided into 4 development regions and in 1982 A.D. one more development region was added making five in total.

The structure of local administration under the Home Ministry had been subject to change from time to time. From 1960 A.D. to 1990 A.D., the administrative institutions were frequently modified/remodeled to suit the needs of the Panchayat System while the Home Ministry was assigned with the task of keeping the Panchayat polity intact and impregnable. The District Administration Plan, 1964 A.D., the Regional Development Concept 1967 A.D., the Decentralization Scheme, 1982 A.D. and similar other plans were formulated.

In 1980 A.D., the Panchayat affairs were separated from the Ministry of Home and a new Ministry named the Ministry of Panchayat and Local Development was formed. Efforts were made to make the Home administration more functional and committed towards maintaining law and order in the country.

The Present Structure of the Ministry of Home Affairs

With the restoration of the multi-party democracy in the country, in 1990 A.D., extensive reforms were made in the organizational structure of the Ministry of Home Affairs. The Zonal administration with its commissioner was dissolved. Endeavours are being made to re-structure the Home administration with a view to strengthening multi-party parliamentary system. The CDO has been empowered with necessary authority to maintain law and order in the respective districts and he has also been made responsible to act as the representative of the central Government. The jurisdiction of the Home Ministry has been defined by Nepal Government's (Work Division) Regulation, 1996 A.D. There are 4 Divisions, 5 Departments, 5 Regional Administration Offices, 75 District Administration Offices, 75 District Police Offices and 73 prisons under this ministry. In addition, field offices have also been established in order to carry out the various functions assigned to this ministry.