Chhetri or Chhettri, synonymous with Kshetri and Khatri are all derivatives of Kshatriya  the warrior and ruler caste group or varna of Hinduism. Chhetris speak Khasa Nepali, the national language, and are part of the dominant Khasa culture and the wider Pahari Indo-Nepali population. Chhetri refers to Kshatriyas from the hills of Nepal but not from the Nepalese Terai or India.
Chhetris are Nepal's largest caste group, 15.5% of the population. Chhetris are overwhelmingly Hindu (99.48% according to the 2001 Census). In Nepal's hill districts their proportion of the population rises to 41% compared to 31% Brahmin and 27% other castes. This greatly exceeds the Kshatriya portion in most regions with predominantly Hindu populations.

Main article: History of Nepal
The Himalaya were considered a sacred place for attaining liberation in Hindu mythology. References to Brahmins and Kshatriyas are found in Banawali (Tantric texts) on Nepal, in whose ancient setting the Kathmandu Valley was still a lake. These texts also mention Lord Krishna, considered a Kshatriya prince who arrived with his cows and stayed in the valley. Kathmandu was ruled by cow herding Gopal Bamsa long before other castes settled the area. The four Narayan temples around the valley were established by these Vaishnava people.
Before the Shah dynasty (1768–2008) united Nepal, kings of various ethnic and caste groups ruled about 50 small kingdoms. The ancient name of this Himalayan region was Khas-des. Khas peoples were the most populous and are mentioned in the histories of India and China. The Khas were Indo-European-speaking Aryan mountain dwellers, spreading from west to east across the hills of the Central Himalaya. They established many independent dynasties in early medieval times. The Khas people had an empire, the Kaśa Kingdom which included Kashmir, part of Tibet, and Western Nepal (Karnali Zone).
Anthropologists believe that within the context of Indo-Aryan migration, the majority of Chhetris derive from unions between Khas and indigenous groups, as the Khas progressively encroached on indigenous homelands. Many Chhetris exhibit traits of mixed racial heritage, more so than Brahmins (called Bahun in the Nepalese hills). There are several recognized ways to enter the Chhetri caste apart from Jharra(pure)Chettri or Khas :
1.    Having nothing but ancestors ultimately tracable to Kshatriyas in India.
2.    Being the scion of a Brahman father and any other "clean" caste including Magar or other Tibeto-Burman "hill tribes".
3.    The child of a Chhetri father and a woman from these lower but "clean" castes is still Chhetri.
4.    An arbitrary community can start following Chhetri caste rules (especially in diet), hiring Bahuns to conduct certain rituals and even to write dubious genealogy. Over generations, these claims of Chhetri affinity become plausible to broader audiences.
Despite racial admixture, Chhetris remain strongly indo-Nepalese in culture and language.
In the early modern history of Nepal, Chhetris played a key role in the unification of the country, providing the core of the Rajput Gorkhali army of the mid-18th century. During the monarchy, Chhetris continued to dominate the ranks of the Nepalese Army, police, Nepalese government administration, and even one regiment of the Indian Army. Under the pre-democratic constitution and institutions of the state, Chhetri culture and language also dominated multiethnic Nepal to the disadvantage and exclusion of many minorities and indigenous peoples. The desire for increased self-determination among these minorities and indigenous peoples was a central issue in the Nepalese Civil War and subsequent democratic movement.