The conflict between development and conservation concerns is a perennial topic in sustainable development, and especially significant for marginalized social groups. In Nepal, fortress conservation in protected areas (PA) gave way to a community-based development and natural resource management (CBNRM) narrative of inclusion and participation in so-called buffer zone (BZ) initiatives around national parks. Studies to date show mixed outcomes of the community-based model for marginalized communities, especially for traditional indigenous river and forest dwellers. Academic and government reports of successes and failures of community-based projects in Nepal assume progress is based on traditional indigenous livelihood practices being abandoned and participation in state modernization initiatives in parks and reserves. Thus, despite promises of participation, evidence to date shows a de facto continuation of fortress conservation thinking and erasure of customary knowledge and livelihoods. Based on an ethnographic inquiry informed by political ecology conducted in two villages of Bote IPs (in the buffer zone area) of the Nawalparasi District of Chitwan National Park (CNP), we describe how state interventions and regulations under the guise of community-based participation actively ignore the moral ecology of traditional riverine livelihoods while pursuing a modernization project. Echoing calls by other scholars and stakeholders, we argue that a new approach to conservation and development that respects the environmental ethics of traditional livelihoods is long overdue in Nepal.