This case study explores the institutions and governing strategies involved in the management of Rupa Lake in Kaski district in Western Nepal, particularly Rupa Lake Rehabilitation and Fishery Cooperative. Methods used for data collection include key informant interviews, household interviews, a focus group discussion and archival records. Institutions were examined for their effectiveness in sustaining natural and socioeconomic systems as perceived by community members. Based on a literature review and the results of the data collected, this thesis builds a case study highlighting Rupa Lake Rehabilitation and Fishery Cooperative's strategies for governing its local watershed and formulates a framework for commons institutions that aim to achieve sustainable outcomes. Based on findings, I argue that no single form of governance is a panacea for solving commons problems, governing strategies should be implemented on a case-by-case basis, and institutions should be involved at multiple levels and always include local input. Additionally, a sustainable institution should provide benefits to society that it can see, function democratically and with transparency, promote a biodiverse ecosystem, elevate marginalized groups, and collaborate with other institutions. These "clumsy" institutions create a series of complex interactions that are robust and adaptive to reflect the ever-changing systems they aim to govern.