Monday afternoon I watched the choreographed dance between protesters and police along New Road. Red flags, fists raised, chanting slogans, protesters surged to the police lines. Then the police would gather and the protesters, anticipating a charge, would ebb back. Soon all one could see were lines of helmets, the backs of those running before them and the yellow jackets of the press, cameras held high, following it all.

Those arrested were packed into police vans and trucks, still waving their flags and chanting. This is the ritual of arrest, a ritual that legitimates one's status as a true protester. For many bystanders, though, it is a spectator sport. Most shops adjacent to the demonstrations don't even bother to close. The protests in Kathmandu seem to lack the fire of conviction and direction. There is a sense of unreality as city life continues undisturbed aside from the predictable traffic jams. Trekking groups move out with regularity along the Everest national highway from Lukla to Base Camp. The Maoists collect taxes, incidents occur, people die, intellectuals (including myself) debate causes, directions and likely outcomes. Although the circle of events seem to be tightening, even the best informed have little idea of where it will lead.

Structurally, however, many of the elements within Nepal and beyond that are likely to shape the future appear clear. Walking above Namche, the tempest in Kathmandu seemed far removed from local realities. All evidence of the political parties seems to have been erased. No posters, signs and party offices. Porters, guides and lodge owners laugh and make dismissive comments when asked about the parties and their demands for reinstatement of parliament. The status of the monarchy doesn't fare much better. Neither of the pillars of Nepal's formal political system has much legitimacy in the eyes of rural Nepalis.

While the leaders struggle for power in faraway Kathmandu, the bureaucracy decays. In 20 days on the trail and climbing, no one ever asked for the permit we purchased to climb Island Peak.

In the vacuum, the Maoists, to use their analogy, swim like fish in the ocean. It may be a more friendly ocean than many in Kathmandu would like to think. Years of ineffective development has generated tremendous rural anger. In the Khumbu, the tax collectors sent by the Maoists are often Sherpas, a wealthy community logically opposed to the Maoist ideology.

The king and the army move where they like and even hold large public meetings. Like a man stepping into a shallow pond, however, they can't stop the water from flowing back once their foot is lifted.

The Maoists probably see a strategic opportunity this year. The international community is distracted by Iraq. Funds and guidance, yes. Direct intervention, unlikely. The monarchy and the political parties are distracted by each other within the ever-narrowing circle of Kathmandu's Ring Road.

India appears increasingly concerned by reported links with its own Maoists and separatists. Pressure to take effective action is likely to grow following the current elections. But what type of action?

For the Maoists, the situation represents a window of opportunity. Outright victory against an organised army is doubtful, but they could shape the terms of peace once a unified counterpart to negotiate with emerges in Kathmandu. They have a strong incentive to keep up the pressure.

Where does all this leave democracy and democratic processes? Whatever the timing and context, at some point the situation will reach a critical juncture and change will occur. A time of choice will come, elections will probably be held, the constitution may be rewritten, political entities and the bureaucracy are likely to re-emerge in rural areas.

There seems to be little debate or awareness, however, of democratic alternatives and how governance structures influence true representation and the ability of a state to actually deliver development services. For those hoping to give Nepal a better future, this is one of the most important challenges.

Marcus Moench is the director of the Institute for Social and Environmental Transition.