For Jigme Khesar Namgyel Wangchuck and the people of Bhutan the wait is over. Two years after his father abdicated, the 28-year-old prince was yesterday crowned King of the Himalayan nation, becoming both the world's youngest reigning monarch and head of state of its newest democracy.

The delay between abdication and coronation had been imposed by astrologers who wanted an appropriately auspicious date for the occasion. It was worth the wait: special guests at the ceremony in Bhutan's capital, Thimphu, and ordinary citizens who witnessed a public event, were treated to a spectacular piece of regal theatre.

The day-long coronation at the Tashichho Dzong Palace began at dawn when three painted tapestries, each four storeys high and depicting images of the Buddha, were unveiled inside the white-painted building.

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As the sun slowly rose, the prince arrived, led by a procession of red-robed monks, banner-carriers, officials and soldiers in round helmets and armed with swords and black shields. Priests chanted blessings to the young man seated cross-legged on an ornate golden throne, and then his father, King Jigme Singye Wangchuck, placed the red and black silk "raven crown" on the head of his son and announced that he was now the Druk Gyalpo, or Dragon King.

Throughout, the Oxford-educated young man looked solemn, allowing himself just one brief and fleeting smile. All the while, monks stood on the surrounding roofs blowing on long horns, clashing cymbals and beating drums. For sheer colour and theatre, the ceremony would have been hard to beat.

The coronation marks another step in the slow journey towards modernisation for a country that only permitted television and the internet in 1999. This year, Bhutan, which has long been an absolute monarchy, held its first parliamentary election. "His Majesty the King will always play a very important role as a moral force in our country," the Prime Minister, Jigmi Thinley, voted in by those first elections, said: "The king will be the force that will ensure the long-term sustainability and resilience of democracy."

The first part of the ceremony was held inside the palace in the centre of Thimphu. In the afternoon, thousands of people lined up outside were given the chance to present the new king with ceremonial white scarves. Parts of the ceremony, which also involved dignitaries placing offerings of wine, fruit, food and symbolic objects including an umbrella and fish at the feet of the prince, were re-enacted in a large outdoor amphitheatre.

Tens of thousands turned out for the celebrations that will continue for three days. "We have walked for more than a week to come," said Dema, a yak-herder from the Himalayas. "The king is like our father; we had to come for his coronation."

The former king, who announced his abdication in December 2006, is credited with putting a country that until recently was decidedly medieval and reclusive on the path to modernity. He also developed the so-called national philosophy of Gross National Happiness, which insists that the spiritual and mental well-being of the country's 700,000 citizens must be a priority.

Yet for all the glowing affection that people may hold for the former king, Bhutan's recent history has dark and troubled moments. In the early 1990s, the country stripped thousands of ethnic Nepalese of their citizenship and forced them into exile, apparently in an attempt to ensure a homogenous culture. Up to 100,000 refugees have been living in camps in Nepal ever since.

Nor was there much room for political dissidents who clamoured for democracy, such as Rongthong Kunley Dorji, who heads the Druk National Congress, which operates in exile from India. Mr Dorji, who says that he was forced to flee Bhutan after being jailed and tortured when he was falsely accused of helping refugees, said he welcomed the king's coronation but hoped the country would work to strengthen human rights. "We sent the king a letter of congratulations," he said. "We are not against the king, but we want democracy and human rights to flourish."

Yet that journey towards democracy has been slow and not without difficulties. The election was initially met with much anxiety and scepticism from people who had never known anything other than the rule of the monarch, and who said they did not want to change.

There were also claims that the two parties who contested the election were too close to the royal family. Critics point out that the People's Democratic Party (PDP) is headed by an uncle of the king, and the Druk Phuensum Tshogpa (DPT) or Bhutan Peace and Prosperity Party, is headed by the now-Prime Minister, Mr Thinley, who is also related to the King through marriage. A third party which sought to contest the election, the Bhutan People's United Party (BPUP) was disqualified by the Election Commission, which decided it did not have sufficient competence or experience.

Amid this uncertainty, many see the monarchy as a uniting force that has helped preserve Bhutanese culture in a country squeezed between India and China. After the seizure of Tibet by China, and the absorption of Sikkim by India, Bhutan remains the last of the once-independent Buddhist Himalayan nations. "This ceremony, it's not just about crowning a prince," said Tinle Tenzin, who has a shoe shop in Thimphu. "It is about a new king who we hope will bring much good for the country and the people in the future."