Prior to the establishment of the monarchy, Bhutan followed a dual system of administration initiated in 1651 by Shabdrung Ngawang Namgyel. Under this Chhosi system, the Druk Desi looked after the temporal administration and the Je Khenpo looked after religious matters of the country. Although this form of government worked for over two centuries, disputes over the succession to office brought about increasing strife and instability by the second half of the 19th century.

Bhutan’s culture and traditional heritage is most visible in its commanding architectural styles displayed by Dzongs (fortresses), Lhakhangs (temples), Goenpas (monasteries), Chortens (stupas), and housing units sprawling over the country. With continual adaptation to local topography, climatic conditions, local material availability and construction technology, indigenous Bhutanese architecture was heavily influenced by religious beliefs and stand as witness to domestic situations over the centuries.

Local materials used in traditional architecture include the generous use of timber for windows, doors, stairs, balconies, columns, beams, and other decorative structures. Large stones hold down wooden shingle roofing over constructions of rammed earth or stone masonry walls.

The largest annual festival in Bhutan is the Tshechu, an event honoring Guru Rimpoche through religious dances performed by monks as well as lay people. The dates and duration of the Tsechu festivals vary among districts but they always fall on or around the 10th day of the month in the Bhutanese calendar.

The Bhutanese are the Drukpas meaning the inhabitants of Druk Yul. They are generally categorized into three broad ethnic groups. The Sharchops are people of the East and are held to be the indigenous inhabitants of the country. The dialect spoken by most of the people in the eastern region is called Sharchopkha. The people of Western Bhutan are called Ngalongs whose descendents are traced to neighbouring Tibet. They speak Dzongkha, which is the national language. The Lhotshampas are the people of the south who began settling in southern Bhutan in the beginning of the 20th century. They are of Nepalese origin and speak Nepali.

The national flag of Bhutan is representative of the country's general features. The secular authority of the king is shown by the upper half of the flag which is yellow, the colour of fruitful action in state and religious affairs. The lower orange half of the flag represents the religious practice and spiritual power of Mahayana Buddhism. The thunder dragon running diagonally across the middle of the flag signifies the name Druk Yul. Its white colour is an expression of purity and loyalty of the various ethnic and linguistic groups in the country. The country's wealth and perfection are the jewels clasped in the dragon's claws, protected by the strength of deities expressed by the snarling mouth of the dragon.

Bhutan’s artistic tradition has its roots in Buddhism with almost all representation in the arts running along the prevailing theme of struggle between good and evil. A rare blend of Tibetan, Indian and Chinese traditional styles in characteristic Bhutanese setting, Bhutanese art is mostly symbolic. Principally located in monastic centers, it is highly decorative and ornamental. The Buddhist nature of Bhutan’s artistic heritage may be traced to Pema Lingpa, the great 15th century terton (treasure discoverer) who was an accomplished painter, sculptor, xylographer and architect.

Bhutan was a predominantly subsistence agrarian country until the 1960s. At present, agriculture continues to be the main source of livelihood for about 79 percent of the people living in the rural areas. The agriculture sector, which includes livestock rearing and horticulture, contributes to 37 percent of GDP. Agriculture based on traditional methods takes precedence over farm mechanization and modern methods. The major crops grown by Bhutanese farmers include rice, wheat, maize and potatoes. Apples, mandarin and cardamom are some of the main cash crops grown for the export market, namely India and Bangladesh.