The 2015 Nepal’s earthquakes caused massive losses of human lives, economy and physical infrastructures as well as cultural heritage. According to the Post-Disaster Needs Assessment Report, approximately 2,900 historical, cultural, religious monuments and heritage sites including World Heritage sites in the Kathmandu Valley were damaged. When the formal reconstruction program began, major heritage sites of Kathmandu Valley including Bhaktapur Durbar Square, garnered much attention of national and international stakeholders such as Department of Archaeology and UNESCO, donors and heritage activists. However, heritage reconstruction became one of the most contested domains, especially in Bhaktapur Municipality, mainly due to the enforcement of international guidelines over local autonomy, historical and cultural identity in heritage reconstruction. Through several months of ethnographic work in 2018 and 2019 from Bhaktapur Municipality, in this paper we address three major questions: How did the dynamics of international and national laws, municipal guidelines, and involvement of different stakeholders affect heritage reconstruction? What approach did community members want to follow for heritage reconstruction and why? Why did Bhaktapur Municipality want to revive the Malla-period architecture through heritage reconstruction? Through a consideration of these questions, we argue that UNESCO guidelines adopted by the Department of Archaeology seem narrow in defining heritage and capturing people’s sentiment about their history and cultural values, which has led to contestations over heritage reconstruction. Conflicts are also caused and fueled due to the new policies and guidelines introduced by the federal government and the constitutional rights granted to the local authorities. The Local Government Operation Act 2017 allowed Bhaktapur Municipality to redefine their cultural identity and with such rights the municipality opposed the UNESCO guidelines for heritage reconstruction and opted for their own designs to revive Malla-period architectures. Likewise, community members preferred user’s group-led reconstruction, claiming that such approach would not only ensure deep sense of ownership of their historical and cultural identity, but also enhance transparency and quality reconstruction. The desire of Malla-period architecture was not only fostered by the awareness of identity politics; it was also means of resisting centralised power over their local autonomy.