Three factors have exerted great influence on the course of Bhutan’s development. The first being continuous culture. As Bhutan was never conquered or colonized, the country developed a culture relatively fee from outside influence, the institution of monarchy, and deep sense of nationhood. The second factor is the environment, which is protected by mountains, often difficult terrain. Thirdly, Vajrayana Buddhism has given the country a view of the world on which the Third and Forth Kings based their policies of developing Bhutan’s potential in every field. This continuing development of Bhutan has been crystallized in a philosophy crafted by the Fourth King of Bhutan, His Majesty Jigme Singye Wangchuck, known as Gross National Happiness (GNH) in the late 1980s. The concept of GNH defines Bhutan’s development objective as improvement in the happiness and satisfaction of the people rather than growth of Gross National Product (GNP). GNH has been the overarching development philosophy of Bhutan as the concept has guided the country’s development policies and programmes. GNH suggests that happiness is the ultimate objective of development. It recognizes that there are many more dimensions to development than those associated with Gross National Product (GNP), and that development should be understood as a total process that seeks to maximize happiness rather than purely economic growth.

The country believes that for a holistic development of the individual and society, it is essential that development achieves a sustainable balance between the economic, social, emotional, spiritual and cultural needs of the people. This has led to the declared objective of viewing development as a continuous process towards maintaining balance between the material and the intangible needs of individuals and society. The concept reminds the country that the means must always be considered in terms of the end and, therefore, every step in material development and change must be measured and evaluated to ensure that it will lead to happiness, not just more development.

The northern region of Bhutan consists of an arc of glaciated mountain peaks with an extremely cold climate at the highest elevations. Most peaks in the north are over 23,000 feet (7,000 m) above sea level with the highest point being Gangkhar Puensum, which has the distinction of being the highest unclimbed mountain in the world, at 24,835 feet (7,570 m). The Black Mountains in central Bhutan form a watershed between two major river systems: the Mo Chhu and the Drangme Chhu. Peaks in the Black Mountains range between 4,900 feet and 8,900 feet (1,500 m and 2,700 m) above sea level, and fast-flowing rivers have carved out deep gorges in the lower mountain areas. Woodlands of the central region provide most of Bhutan's forest production. The Torsa, Raidak, Sankosh, and Manas are the main rivers of Bhutan, flowing through this region. Most of the population live in the central highlands.

In the south, the Shiwalik Hills are covered with dense, deciduous forests, alluvial lowland river valleys, and mountains up to around 4,900 feet (1,500 m) above sea level. The foothills descend into the subtropical Duars Plain. Most of the Duars is located in India, although a 6–9 mile (10–15 km) wide strip extends into Bhutan. The Bhutan Duars is divided into two parts: the northern and the southern Duars. The northern Duars, has rugged, sloping terrain and dry, porous soil with dense vegetation and abundant wildlife while the southern Duars has moderately fertile soil, heavy savannah grass, dense, mixed jungle, and freshwater springs. Mountain rivers, fed by either the melting snow or the monsoon rains, empty into the Brahmaputra River in India.

Bhutan is a country of festivals. The most important are the religious dance festivals, known as Tshechus, which are held in different districts, at specific times during the year. It is celebrated for three to five days. These festivals are held in the honor of Guru Rinpoche (the saint who brought Buddhism to Bhutan and the Himalayan world) to commemorate his great deeds. Rare dances and sword dances are performed in the courtyards and temples of the Dzongs. The origin of most of the dances can be traced beyond the Middle Ages and are only performed once or twice a year. Each dance has its own significance and is performed by monks and villagers dressed in bright costumes. Many visitors come to Bhutan to witness these festivals held annually throughout the country. The most popular for tourists are those held in Paro during spring, Thimphu and Bumthang in autumn. The Tshechus are important religious festivals and it is believed that by attending them one gains merits and blessings. They are not somber formal religious affairs, but occasions to get together, renew acquaintances and make merry. The atsaras (traditional clowns of the Tshechu) add colour and merriment to the festival by their bawdy antics.

Each valley has is own special celebrations and guardian deities. The high point of the year is the Tshechu- a religious dance festival held in their honour. The Tshechu at Bumthang is well-known for taking place almost entirely during the night and containing exciting fire dances which are intended to help the childless women at the festival conceive during the forthcoming year. Tshechus attract crowds that sometimes travel from the remotest of villages. In a swirl of colour and nice, the gods and demons of Buddhist mythology come to life. The colourful ceremonies, religious theatre and exorcism ritual, are the most striking testimonies to the deep-rooted faith of Bhutan’s society.