By Charles Haviland
BBC News, Kathmandu
Prachanda has a massive task ahead of him
The elevation of Nepal's chief Maoist, the leader of the former rebels, Prachanda, to the prime ministership is something he could barely have dreamt of just three years ago.
By the early 1980s, with political parties still banned, "The Fierce One" had abandoned his job as a teacher and was operating underground as an outlaw.
Not until 2006 did he appear in public again, after the end of a decade-long Maoist insurgency that cost 13,000 lives.
Whether he retains his war name or reverts to being Pushpa Kamal Dahal, the new prime minister has a massive task ahead of him.
The euphoria surrounding the restoration of democracy two years ago; the successful elections this April; the historic end of the monarchy shortly afterwards - these have been milestones.
The last two years have been full of historic symbolism as the old Hindu kingdom became a secular republic, sweeping away all references to its past, to the delight of some and the dismay of others.
But at the same time, state authority has crumbled so much that many Nepalis are in utter despair.
A sense of anarchy prevails nationwide, so much so that mention of the phrase "the government" tends to elicit scornful sniggers.
Crime and violence have spiralled. The slightest grievance brings people onto the street to demonstrate or blockade. For example, eastern Nepal has been at a complete standstill for six days, called by transport workers in protest at the murder of a bus driver and a broad lack of security.
Not only that. The shortages of petrol, diesel, kerosene and gas are beyond measure because the authorities won't balance the financial books.
There is severe hunger in the hills. There are power cuts at the height of the rainy season. The police appear unable to do little else other than arrest demonstrating Tibetans.
The historic end of the monarchy has been a milestone
The politicians including the Maoists have largely ignored all this, squabbling about ministry allocation for weeks on end and scarcely acknowledging ordinary people' problems.
Luckily most Nepalis are adept at getting on with their lives despite their rulers, so the country has not imploded.
As prime minister, Prachanda will also have to draw together a country which for the past year-and-a-half has been displaying new and worrying fissures along ethnic and regional lines.
As a man who comes from the hills but moved to the southern flatlands as a child, he is only too aware of the widening rift in the south between people of hill origin and the Madhesis -southerners ethnically close to neighbouring Indians who have been campaigning against their marginalisation since late 2006.
Although the new president and his deputy are both Madhesis, the community's sense of grievance persists.
Violence in the south-east bubbles away, with shadowy rebel or criminal groups proliferating and people dying each week.
In July a Roman Catholic priest was killed by a militant Hindu group waging what it called an "anti-Muslim campaign".
In an ethnically complex society, many more regional groups are emerging and clamouring, mostly peacefully, for inclusion.
Perhaps the biggest question is how the Maoists can transform themselves into a party of government.
'Switzerland of Asia'
After the Maoists' surprise but convincing victory in the April elections, their deputy leader admitted to having some "sleepless nights" given the prospect of running the country.
Having promised, extravagantly, to make Nepal into the "Switzerland of Asia", they have encouraged high expectations.
Nepalese traditionalists worry that the former rebels retain a totalitarian bent.
This is a party which still sports Stalin as an icon and praises him - alongside Mao, of course. It has not renounced violence.
There is a widening rift between people of hill origin and the Madhesis
Less than two years ago Prachanda told the BBC Nepali Service: "As a party struggling for the hard-working people, we should not torture anyone, even when someone needs to be eliminated."
Since the election, many accounts have emerged of the way Maoist cadres cheated at the ballot boxes in far-off places, and in May party members killed a businessman inside a military camp.
Yet now could also be the time when the Maoists are given a chance to prove themselves: to show they are serious about the social transformations in whose name they went to war.
They have a very strong presence in the villages, and many now long for them to be able to build on the starts they have made at eroding caste and gender discrimination.
They also promise a more equitable system of land ownership.
This will be a test of other politicians, too: of whether they can shake off their ingrained habit of trying to do down their rivals and prevent others from getting credit for change.
There are still further challenges ahead.
Many people whose near and dear ones died or disappeared during the conflict are awaiting truth and justice. They will want the authorities to provide it.
On a different matter, having a Maoist prime minister may help resolve the future of the 19,000 Maoist former combatants still in camps as part of the UN-assisted peace process.
With a new prime minister and president at last in place, one more task can also get properly under way - the writing of a new constitution by the huge assembly elected in April.
Hitherto its members have complained that the body is being marginalised by the usual coterie of establishment politicians.
There has been enough talking. The work must now begin.