Posted by: Rajesh BP June 3, 2015
Why so many Nepalis have their lastname "SHRESTHA" ?
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हैन DHOTI किन हो मधेसी को खोक्रो मास्क लगाएर किन आफ्नै खिल्ली उडाउँछौ?

Anyway going back to the topic, I finally found some good research evidence on this question that actually is similar or legitimizes many things previous posters have written in this thread. I guess this finally answers the question -

Although many belonging to Srēṣṭha or Śeśyah caste began to adopt ‘Shrestha’ as their caste name as early as the 18th century, unlike other Newar castes, the surname "Shrestha" is found in every district of Nepal. One of the reasons behind it is the adoption of Shrestha as one’s surname once a family belonging to any of the Newar caste moves to settle far off places from the Kathmandu Valley. Shrestha surname is equated to all the Newars in the areas outside of Kathmandu Valley. Other castes like Sakya, Vajracharya, Prajapati, Jyapu and Jogi all adopted Shrestha as their caste name. Similarly, cross breed children begot from a Newar and any other caste/ethnicity also adopted Shrestha as their caste name. Many lower castes have also adopted the name Shrestha; the status they then assume tends to be expressed in the traditional idiom i.e., one moves up to a higher hierarchic (ascribed) position like well-to-do Jyapus assuming the name ‘Shrestha’. Similarly, outside Nepal, for instance in Darjeeling and Sikkim, almost all the Newars used ‘Pradhan’, another high-caste Srēṣṭa surname, as their common name. The Newars of Nepal however see the status and purity of these Pradhan from Sikkim and Darjeeling with doubt as they do with the Shrestha of Nepal.

http://www.academia.edu/1434675/CastesAmongNewars_Status_of_Shrestha
Subba, J. R. (2011). History, Culture and Customs of Sikkim

Also, this from Wikipedia but it seems legit-

"Presently, many Panchthariya Shresthas opt to write "Shrestha" instead of their traditional family clan names indicating their specific occupations. Char-thariya Shrestha are even lowered in the social status and consists of those from non-Srestha background who try to emulate or establish the Srestha (Chhathariya and Panchthariya) status by pretending their norms or simply, in many cases, adopting the general caste-denoting surname like 'Shrestha' or in other instances 'Joshi', 'Singh', 'Achaju', or 'Pradhan'. Panchthariya and especially Chathariya reject the claims of such pretensions and prevent caste endogamy and commensality with such groups."
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