‘Water poverty’ is a hidden crisis in selected Palika's of Nepal, arising from factors such as population growth, climate change, land use alterations, and erratic infrastructure development, significantly impacting water resource quantity and quality. Addressing this requires location-specific indicators like the Water Poverty Index (WPI) for effective water resource planning. This study investigates water poverty causes in the area, analyzing five WPI components: Access, Resource, Usage, Capacity, and Environment. Introducing 10 WPI indicators and 13 context-specific variables tailored to Nepal, the research assesses water poverty across different spatial scales (metropolitan, sub-metropolitan, municipality, and rural municipality). The results show WPI scores ranging from 62.96 to 72.77, highlighting the need for targeted policy interventions. While no clear trend emerges across scales, higher resource and access scores prevail in all areas, with use, environment, and capacity scores higher in metropolitan and sub-metropolitan regions. These disparities underscore the need for tailored policies and management plans across scales to improve water poverty in the studied regions.