Rangelands are considered critical ecosystems in the Nepal Himalayas and provide multiple ecosystem services that support local livelihoods. However, these rangelands are under threat from various anthropogenic stresses. This study analyzes an example of conflict over the use of rangeland, involving two villages in the Mustang district of Nepal. This prolonged conflict over the use of rangeland rests on how use rights are defined by the parties, that is, whether they are based on traditional use or property ownership. Traditionally, such conflicts in remote areas were managed under the Mukhiya (village chief) system, but this became dysfunctional after the political change of 1990. The continuing conflict suggests that excessive demand for limited rangelands motivates local villagers to gain absolute control of the resources. In such contexts, external support should focus on enhancing the management and production of forage resources locally, which requires the establishment of local common property institutions to facilitate sustainable rangeland management.