This thesis builds on an ethnographic study of revolutionary action in rural Nepal by conceptually grounding it in political, economic and historical analyses of capitalist development and state formation. Nepal’s hilly periphery has become an important region, where systemic change and the rise of political movements make it necessary to understand the inter-relation between broader structures of power and local cultural meanings of resistance. The recent political history of Nepal has seen the interplay between these forces through the rise of peasant politics that culminated in Maoist politics. This movement process, politically marked by a 10-year long People’s War, has led to the establishment of a federal republic and reshaped the socio-political landscape of rural Nepal. The thesis draws on long-term fieldwork engagement in the former Maoist base area in Mid-Western Nepal. Through participant observation, interviews, life stories and discourse analysis, the thesis explores the transformations of political consciousness in rural Nepal. The first part of the thesis focuses on the ‘conditional element of class’, through which I explore unifying and pluralizing tendencies of capitalist modernity. By engaging with the topics of modernity, development, state-formation, and the theory of uneven and combined development, chapters 3-7 explore the background of the peasant movement process that is grounded in Nepal's integration into the global capitalist economy. The second part of the thesis focuses on the ‘potential element of class’ and the post- revolutionary context of the Maoist insurgency by ethnographically studying the Maoist movement process in Kham Magar villages. The multi-layered analysis of the uneven development of revolutionary action digs deeper into the political process of the People’s War to show how the Maoists created their discourse of resistance. I follow these developments that overgrew the Maoist framing process and small scale organizing to the larger political-ideological institutions that established the Maoist base area. The history of Maoist rule in the village of Maikot shows that in the former base area, the Maoists organised the peasant’s experience into a thickly interwoven world of ‘subaltern counterpublics’. Although the Maoist movement has seen its decline, I argue that to understand the process of social transformation in rural Nepal, we should investigate the constantly changing elements of the subaltern experience. I explore this through the life stories of former Maoist combatants that map the rough coordinates of the post- revolutionary common sense. This topic is also addressed in the doctoral ethnographic film Taking on the Storm (2021), a filmic exploration of post-revolutionary common sense in the former Maoist base area. Maikot’s post-revolutionary context is further explored by analyzing the yarsagumba economy, an ethnographic narrative that explores the peasants’ increased dependency on this lucrative commodity chain. In the last chapter entitled Mushroom at the Top of the World (accompanied by a film with the same title), I show how the yarsagumba economy has created a hybrid form of subsumption, reflecting the contingency and unevenness of capitalist development in rural Nepal. I argue that the post-revolutionary situation in Rukum has increased the integration of peasant lives into dependent precarious livelihoods concealed by politics of autonomy. This has created a situation in which class struggle increases the power of rural elites over the resource-dependent peasantry. Maikot’s ethnographic example brings us to a conceptualisation of peasant politics and capitalist development, where the potential elements of class strengthen the power of the rural elites, creating a form of passive revolution.