Holi starts one week before the main day of Holi in Nepal. There is a ritual of erecting the long bamboo stick (lingo) covered with pieces of different colors clothe (chir) in Basantapur Durbar Square, Kathmandu at the beginning of the week. To mark the end of the Holi the festival the lingo is taken down and the Chir is burnt. This event is called Chir Haran or Holika Dahan.
Lots of tourists participate in this festival with the locals especially in the Thamel and Durbar Square areas. This festival is also becoming popular throughout USA and Europe.
What else? Stay in (or come to)Thamel, wear old comfortable clothes that you won’t mind to throw away (cause nobody is safe from color on this day and nobody is meant to) and if you would like to play with locals just buy some colors, water guns, balloons and/or bucket and just join anyone in the street.