There are more than 100 different nationalities inside Nepal. All of them share one citizenship.
Nationality is cultural. Citizenship is political. Your citizenship is your relationship with the state. The state is composed of people on the taxpayers' payroll: the police, the army, the MPs, the ministers, the Prime Minister, the president, the administrators, the ambassadors. Together they form the state that all citizens can and should be able to lay claim to. The citizens are the boss. Those people who together form the state are on the people's payroll. That state is something concrete. Nationality is more ephemeral. It is composed of things like language, culture, customs, myths, often marital bonds for many people, although mixed marriages are a wonderful thing, and more people should go for it.
When a country is composed of 100 plus nationalities, you want to go for federalism to accommodate as many nationalities as possible. Each such constituent state could become a separate country, but they choose to be part of a federal state. That is federalism. It is a concept of many countries coming together, because it makes political and economic sense to do so. You can not create 100 plus states, but you want to create as many as possible. You can not accommodate all 100 plus nationalities, but you want to accommodate at least the largest ones, maybe the 10 largest ones. And you create a Madhes state, a Tharuhat, a Kirat, a Newa, a Tamasaling, a Magarat, a Tamuwan, a Khasan. Those are eight states honoring the eight largest nationalities inside Nepal. Ideally you would have wanted one for each of the 100 plus nationalities. But you can't. So you create eight for the eight largest ones.
Maithili and Newari are perhaps the two richest cultures in Nepal. It is unimaginable you can have federalism and not have states named after these two cultures. That would be like saying Pashupatinath is too particular a name, let's just call it a religious center.
Then you start at the other end with the smallest groups like the Rautes and Chepangs. They are small in number, but they are distinct nationalities. You want to create specially protected zones for them inside those states.
Then you want to address everyone else who got left out. And a great way to do that is by honoring their languages, because for most nationalities it is their language that is the largest portion of their distinct identity. In each of those eight states, if you welcome the three or four largest languages as legitimately recognized languages of government and primary education, that would go a long way. More nationalities would get accommodated. You do that and you have perhaps accommodated another 50 or so nationalities.
That still leaves about 50 nationalities. For that you make special provisions at the local government level. Nationalities that are not small enough like the Rautes and the Chepangs to get special protection or not large enough like the Madhesis, the Tharus, the Kirats, the Newars, the Tamangs, the Magars, the Gurungs, and the Khas to get a state of their own, you try and accommodate them at the local government level. Nationalities with a sizable presence in any village, town or city should be able to use their language in their local government.
This will not create confusion. Nepali is the lingua franca in the hills and the mountains, and Hindi in the Terai. You should be able to go to any government office anywhere in the country and choose to conduct business in one of those two languages.
This is how you accommodate the 100 plus nationalities in Nepal. If 100 plus nationalities can live together in one country Nepal, why can't 30 nationalities live together in a state called Madhes, or another 20 in a state called Tharuhat, or 10 in a state called Kirat?
Citizens of the country have political equality at every level of the state machinery. Because their equality is ensured by the Universal Declaration Of Human Rights that is a bedrock of Nepal's constitution. Citizens of a country are free to move around, they are free to inter marry. They can go to any part of the country to live, to work, to settle. That is the concept of a modern state.
This kind of inclusive, federal state is not only the best way to take Nepal to rapid economic growth, it is the only way. If the unitary system were an alternative, Nepal and America were at similar stages of socio-economic development when Prithvi Shah was king. Go figure.