Kathmandu Valley: A Historical and Cultural Gem in Nepal Kathmandu Valley, lying in the center of Nepal, the capital city , has a rich history; it is believed that in pre-historic times, it was a huge lake that was drained by Manjushree, a Buddhist saint, to make a path for human settlement and later on, people started farming and building houses. Kathmandu itself is UNESCO World Heritage Site which is famous for its cultural diversity, ancient arts and architecture, and holy spiritual significance, luring the travelers from all over the world.