Perhaps Tenzin Rabgye's greatest achievements were his tolerance towards the Nyingmapas, who retained an overwhelming following in the central and eastern regions, and the establishment of a Monk Tax, whereby every family with more than three sons was obliged to enroll one within the monk body. In this way he contributed to both the political acceptance and the numerical strength of the Drukpa theocracy. However, he failed to produce an heir, and upon his death the country entered almost two centuries of political turmoil and internal instability. Although the system established by the Shabdrung proved efficacious in many ways, maintained an ongoing importance and forms the bedrock for numerous contemporary institutional arrangements, it was critically weakened by its over-reliance on an ambiguous leadership. Problems emerged in finding subsequent reincarnations of the Shabdrung, and those who ascended the throne proved more inclined towards religious rather than political activities, thereby becoming little more than figureheads in the temporal realm.

The eighteenth and nineteenth centuries were a period of almost continual internal political disruption as countless Desis, ponlops and dzongpons vied for control. However, although temporal power became more devolved, reverting back to a more regional character, the Shabdrung remained a greatly revered figure, the Drukpa Kagyupas retained spiritual ascendancy and struggles were essentially conducted within the parameters implied by the established political infrastructure. A vision of national unity had been introduced and acknowledged, and ambitious local leaders now aspired to this scope of control. The emergence of Jigme Namgyal, the Tongsa Ponlop, as a new dominant authority in the second half of the nineteenth century, and the subsequent establishment of a monarchy, may therefore be interpreted as an inevitable continuity rather than particularly revolutionary.

Born in 1825 a descendant of the important religious saint Pema Lingpa and distant relative of Shabdrung Jigme Dragpa II (1791-1831), at a young age Jigme Namgyal joined the retinue of the then Tongsa Ponlop and quickly ascended the ranks. At this time the central government was becoming increasingly weak, and the two principal Ponlops of Paro and Tongsa largely controlled western and central and eastern regions respectively. A key actor in the consolidation of regional authority and increasingly in central government matters, Jigme Namgyal was appointed the Tongsa Ponlop in 1853, gaining a reputation for political genius as both a strongman and talented mediator. Having consolidated and expanded his sphere of influence, by the time of the British mission of 1864 under Ashley Eden he conducted all negotiations for the Bhutanese, thus proving him the preeminent political figure and overall ruler of the country in all but name. He retired as Tongsa Ponlop in 1866, had a short reign as the 50th Desi from 1870-1873, and in the same year suppressed a general rebellion in the west. By the time of his death in 1881 a degree of political cohesion had been restored to the country, with his family and close allies occupying the major ruling positions. It was however left to his second son and heir apparent, Ugyen Wangchuck, to further consolidate his father's initiatives.

Born in 1862 and groomed by his father from a young age as a successor, Ugyen Wangchuck was appointed Paro Ponlop when seventeen. Although his political stature had been established, his dominance was yet to be fully confirmed and the personal ambitions of others remained unfulfilled. In 1882 he had to intervene following intrigues over the position of Tongsa Ponlop, and, relinquishing his existing title to his brother, he assumed the post himself. The move away from the west created an opportunity for an opposition to surface, and his former friends the Thimphu and Punakha dzongpons duly began to hatch a plot against him. Responding to a series of subversive actions, he assembled an army and in 1885 following consecutive victories and a failed arbitration the rebellion was crushed. This triumph marks a turning point in Bhutanese history, as almost two hundred years of internal instability were brought to an end. With the reemergence of a hegemonic power, Bhutan entered the twentieth century as a united and essentially peaceful nation.

Ugyen Wangchuck was now the undisputed leader within the system of government initiated by the Shabdrung. In 1886 he appointed Lopon Sangye Dorje as the 55th Desi and assumed the position of gongzim (Chief Chamberlain) in addition to being Tongsa Ponlop, the post closest to the head of state, the incarnate of the Shabdrung. However, with the nature and scope of his authority as yet not institutionalized, there remained the risk that upon his passing instability may return. The opportunity for a systemic shift occurred following the death of the Shabdrung Jigme Chogyel in 1904 and the retirement of the 55th Desi in 1905. With a reincarnation yet to be recognized and the possibility of a political vacuum, a petition was presented to the State Council asking them to consider making Ugyen Wangchuck the King of Bhutan. This suggestion was unanimously accepted and on 17th December 1907 Ugyen Wangchuck was crowned the First King of Bhutan, and the position was made hereditary. In 1908 the King appointed his close friend and principal advisor Kazi Ugyen Dorje as gongzim and made this post hereditary. A twentieth century monarchy was thus established and has remained a fundamental ongoing presence, proving the critical factor in the maintenance of national stability and sovereignty and a guiding light as Bhutan gradually emerges into the modern world.