Community forest management (CFM) originated in 1970s as an alternative arrangement of forest governance, which has now become a flagship institution for sustainable management of forests in developing countries. The premise of CFM asserts that the control over forest use and management is devolved to the forest users at the community level. With the increasing knowledge about role of forests in climate change, CFM has been identified as a core strategy for implementing climate change mitigation policies such as reducing emissions from deforestation and forest degradation in developing countries (REDD+). This thesis is motivated by research questions that are crucial for advancing our understanding of the gaps and weaknesses of CFM in its current form. Hence, in this thesis, I set out to revisit its key elements, i.e. decision-making, user participation and the collective capacity (in the form of social capital) of forest users to engage in collective management of forests. Nepal provides an excellent study site because of its extensive history of community forest user group (CFUG) establishment since forty years. CFUG is a local-level institution for forest management where the local people make decisions regarding forest management, utilization, and the distribution of benefits from the forests.