Study of the community level adaptive capacity and adaptation practices is important to capture the ongoing processes,
constraints and opportunities at the local level where adaptations ultimately occur. Even at the local level, emphasis must be placed
on marginalized communities as they are the ones who are the most vulnerable. This study focuses on the Chepang community,
one of the highly marginalized indigenous nationalities in Nepal. This paper presents micro-level analysis of the inherent adaptive
capacity and the ongoing adaptation practices based on the information obtained through direct interaction with Chepangs at the
household level. The adaptive capacity, taken as the function of asset possession by the households, and measured in terms of an
aggregate index is compared across the four study sites. Ongoing adaptation practices are categorized according to fivefold
classification based on risk pooling across space, time, assets, and households and measured in terms of adoption rate by the
households. Finally adoption rate of adaptation practices is compared with adaptive capacity across the four study sites to analyze
if the adoption rate is indeed determined by the inherent adaptive capacity. Results show that balanced possession of all asset
categories is necessary to translate adaptive capacity into adaptation actions. There is thus a need for integrated development
activities that aim to promote a balanced growth in terms of infrastructure, human capabilities, financial capital and social
networks.