The study aims to report the ethnobotanical significance of medicinal plants for the treatment of various diseases, phytochemical constituents of those plants, their allelopathic effect, and impact of those plants on the socioeconomic aspect in Gulmi and Okhaldhunga district of Nepal. Altogether 41 species of medicinal plants from two areas were documented, using a semi-structured questionnaire. They have been using those species for the treatment of different ailment ranging from gastrointestinal problems, respiratory tract related problems, cuts and wounds, and dermatological problems. 18 of the potentially valuable medicinal plants were brought for performing secondary metabolites tests in methanol extract. The extracts have shown the presence of alkaloid, carbohydrate, glycosides, flavonoids, tannins, terpenoids, saponins, oil and protein, out of which alkaloid was found to be present in every sample. In contrast, only 5 possessed protein. Out of 18 plant extracts, 11 most valued ones were isolated to carry out allelopathy tests on mungbean seed. Only the control treatment bored germination of the mungbean with full radicle and plumule development. This study also reports the impact of the use of medicinal plants in people’s daily life.