The native culture in the Kathmandu valley is Newari. There were city-states ruled by local kings and in each city: Kathmandu, Pataan and Bhaktapur, the rulers were of the Malla family. In Bhaktapur, the Malla family lived inside a large palace complex of which the eastern section was known as the Palace of 55 Windows. It is remarkable for the incredible degree of wood workmanship - Bhakatpur is a center for wood working. The palace, along with many of the other buildings in the Durbar Square, was severely damaged in an earthquake in 1934. In the 1970's with help from Germany, much of the Durbar Square area was restored.
Here is another view of the animals flanking the entrance stairs up into the temple. Behind and to the right, you can see part of the Palace of 55 Windows - a very extravagant example of Newari architectural prowess.
The Siddhi Lakshmi mandir (temple) sits next to the Palace of 55 Windows. As you ascend the steps, you walk past pairs of guardians - the animals all set at heights according to their religious strengths in the Hindu world.
Pottery Square is a square that is a few hundred meters south of the Durbar Square in Bhaktapur. It is an area where local potters come and make use of communal open-air kilns to fire up their creations. You can watch all facets of pot production, spinning, firing, drying.
What to buy: Well, here you are looking for pots, of course. Prices vary depending upon what you are looking for. Also in Bhakatpur, you will find beautiful woodwork - masks, furniture, intricately engraved windows - and also fine thankas - a form of religious paintings that are extremely detailed in both production (hand painted over many hours) and in how you actually use the picture - they are aids to meditation.
What to pay: Pots and wood work vary in cost depending upon workmanship and what they are. Thankas go for $100 and up.
This square is a bit farther away from Durbar Square in Bhaktapur and many people don't quite get over here. It is maybe 1.5 km away and is not too hard to reach if you can read a map - you get a little one with your admission to the Bhaktapur Durbar Square. There are more Newari Hindu temples and there is the Peacock Window just off of the square - an very intricate piece of woodwork that symbolizes the level of woodworking ability to be found here. There are many woodworking shops on or near the square as well.