Although knowledge of past history Bhutan has yet to emerge through archaeological study, stone tools and weapons, remnants of large stone structures, and megaliths that may have been used for boundary markers or rituals offer demonstrate of civilization as early as 2000 B.C. The absence of neolithic mythological legends argues against earlier inhabitation. A more certain past history time has been theorized by historians as that of the state of Lhomon or Monyul, possibly a part of Tibet that was then beyond the pale of Buddhist teachings. Monyul is thought to have existed between 550 B.C. and A.D. 620. The names Lhomon Tsendenjong and Lhomon Khashi, found in ancient Bhutanese and Tibetan chronicles, may also have credence and have been used by some Bhutanese scholars when referring to their homeland. Variations of the Sanskrit words Bhota-ant or Bhu-uttan have been suggested by historians as origins of the name Bhutan, which came into common foreign use in the late nineteenth century and is used in Bhutan only in English-language official correspondence. The orthodox name of the nation since the seventeenth century has been Drukyul- -nation of the Drokpa, the Dragon People, or the Land of the Thunder Dragon--a reference to the nation's dominant Buddhist sect.

Some scholars believe that during the early historical time the inhabitants were fierce mountain aborigines, the Monpa, who were of neither the Tibetan or Mongol stock that later overran northern Bhutan. The people of Monyul practiced the shamanistic Bon religion, which emphasized worship of nature and the existence of good and evil spirits. During the latter part of this time, historical legends relate that the mighty king of Monyul invaded a southern region known as the Duars, subduing the regions of modern Assam, West Bengal, and Bihar in India.