The study describes the issues relating to community forestry in the Terai of Nepal, based on direct field observations and informal interviews with various community forestry user groups and government forestry professionals from 20 districts. It is argued that the trend of forest degradation has decreased since handover, while at the same time a number of unintended social anomalies have also arisen, including loss of rights following land grabbing by influential groups, decision making by elite members of society and illegal settlement. Such anomalies essentially constitute inequity and unfairness at the local and national level, and in terms of long-term sustainability of forest resources. To minimize such irregularities, a steady and process-oriented handover is suggested, instead of those based on inadequate field work.