American Heritage Dictionary and Merriam Webster Dictionary both have the same definitions: Nepali n. pl. Nepalis 1. A native or inhabitant of Nepal. Nep·al·ese n. pl. Nepalese 1. A native or inhabitant of Nepal. Again, I don't see what's the big deal. Use whichever one you want. Contrary to what most people think, Nepalese is not an english term for Nepali. Both are valid english words.