The sputtering row over the 'Indian' priests of Pashupatinath Temple in Kathmandu has its origins in the xenophobia that evolved as part of the hill-centric Nepali nationalist psyche, a mindset that is used by modern-day demagogues to garner easy popularity and support. Since before the time of Nepal's unifier, Prithvi Narayan Shah, two and a half centuries ago, the hill principalities have been wary of 'Mughlan', or the plains-land of the Mughals. Kathmandu Valley's rich mini-kingdoms, in particular, harboured deep antipathies against the powerful nawabs and rajas of the south. One mythical story from Patan town refers to how a local tantric named Gaibhajya overcame a tantric from Mughlan. This besting of 'India' is recounted with glee to this day.
At the dawn of Nepal's modern era in the mid-20th century, King Mahendra stoked this historical xenophobia in order to consolidate his own authoritarian grip. With the emerging power of modern India, the historical ultra-nationalism coagulated into anti-Indianism. The fallen democrats, led by Bisweshwor Prasad Koirala, were all termed arastriya tatwa (anti-nationals), a synonym for 'Indian lackey'. Two full generations of the Panchayat era were groomed as xenophobes, even as those in power in Kathmandu knew they had no choice but to secretly supplicate before the Delhi Durbar.
The Communist Party of Nepal (Maoist) essentially incorporated Mahendra's ultra-nationalism as a plank and platform by which to raise populist support. The Pashupatinath episode is the result of this simplistic head-in-sand chauvinism that has been fed to the Maobaadi cadre, with its uni-dimensional view of Nepal's history. Meanwhile, the Maoist leadership is simultaneously loudly anti-Indian in public and sycophantic towards New Delhi in private.
Pashupatinath's origins go back to pre-history as a peeth, or power place, dedicated to the 'lord of the beasts', at the outskirts of ancient Kathmandu by the Bagmati River. As it evolved into a temple dedicated to Shiva, from the Lichhavi period till the 16th century sansyasis from the plains are said to have come to serve as priests. In the mid-1700s, the tradition began of bringing the mool bhatta, or head abbot, from south of the Vindhyas. It continues to this day, interestingly mirrored in many priests of hill Nepali origin serving in their thousands in power places of India today.