Nepal has undergone several policy reforms over the years to address multi-dimensional global conservation goals. However, such reforms, in most cases, seems disregarded the participation of local people; leading to the conflicting situation between the state and the people. Relocation program, one of the government policy implemented to enhance levels of nature protection, carried out involuntarily, has often been accompanied by poverty, deprivation, and dissatisfaction among local people. Based on the desk review of conservation policies and field study from in and around Shuklaphanta Wildlife Reserve (SWR), we analyzed the effect on the local people due to changes in policies for managing protected areas (PA) over the years. The results showed that the involuntary displacement of households from PA especially indigenous communities resulted negative social impact including restriction on people’s customary rights to access natural resources and direct impact on livelihoods. This chapter suggests that such policy reforms and integrated management should be done with proper participation of people being affected, therefore, to insure sustainability of the policy implementation.