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Updates: 

Samuel Villavicencio found area estimates for the districts in a report called Renewable Natural Resources Development Indicators for 10th Five-year Plan Preparations  (PDF, slow download).

Sorin Cosoveanu found the Bhutan 2005 census  page (PDF, slow download). I've updated the populations in the table below.

International standard ISO 3166-2 was published on December 15, 1998. It superseded ISO/DIS 3166-2 (draft international standard). For Bhutan, there were several changes from the draft standard. In the final standard, the districts are no longer grouped into regions. Also, two new districts have been added. Their names are Gasa and Tashi Yangtse. From other sources, it appears that these two districts were already in existence by 1994. The news of their creation has been slow to filter through to the West. The capitals of the two new districts have the same names as the districts. The ISO codes for the new districts are two letters, unlike the older ones, which have two digits.

Country overview: 

Short name	BHUTAN
ISO code	BT
FIPS code	BT
Language	Tibetan (bo)
Time zone	+6
Capital	Thimphu

 

Bhutan has been an independent kingdom throughout the 20th century.

Other names of country: 

1. Danish: Bhutan
2. Dutch: Bhutan, Koninkrijk Bhutan (formal)
3. English: Kingdom of Bhutan (formal)
4. Finnish: Bhutan
5. French: Bhoutan m
6. German: Bhutan n
7. Icelandic: Bútan
8. Italian: Bhutan m
9. Norwegian: Bhutan, Kongeriket Bhutan (formal)
10. Portuguese: Butão m, Reino m do Butão m (formal)
11. Spanish: Bhután, Bután, Reino m de Bhután m (formal)
12. Swedish: Bhutan
13. Tibetan: Druk-yul (formal)
14. Turkish: Butan Krallığı (formal)

Origin of name: 

From Sanskrit bhotas: Tibet, antas: edge (i.e. land on the edge of Tibet). Druk-yul is Tibetan for Land of the Dragon.

Primary subdivisions: 

Bhutan is divided into twenty dzongkhag (districts).

District	HASC	ISO	FIPS	Population	Area(km.²)	Area(mi.²)	Capital
Bumthang	BT.BU	33	BT05	16,116	2,831	1,093	Jakar
Chhukha	BT.CK	12	BT06	74,387	1,791	692	Chhukha
Chirang	BT.CR	21	BT07	18,667	641	247	Damphu
Daga	BT.DA	22	BT08	18,222	1,387	536	Daga
Gasa	BT.GA	GA		3,116	4,561	1,761	Gasa
Geylegphug	BT.GE	31	BT09	41,549	2,362	912	Geylegphug
Ha	BT.HA	13	BT10	11,648	1,746	674	Ha
Lhuntshi	BT.LH	44	BT11	15,395	3,022	1,167	Lhuntshi
Mongar	BT.MO	42	BT12	37,069	1,946	751	Mongar
Paro	BT.PR	11	BT13	36,433	1,310	506	Paro
Pemagatsel	BT.PM	43	BT14	13,864	518	200	Pemagatsel
Punakha	BT.PN	23	BT15	17,715	977	377	Punakha
Samchi	BT.SM	14	BT16	60,100	1,585	612	Samchi
Samdrup Jongkhar	BT.SJ	45	BT17	39,961	2,312	893	Samdrup Jongkhar
Shemgang	BT.SG	34	BT18	18,636	2,126	821	Shemgang
Tashigang	BT.TA	41	BT19	51,134	2,316	894	Tashigang
Tashi Yangtse	BT.TY	TY		17,740	1,643	634	Tashi Yangtse
Thimphu	BT.TM	15	BT20	98,676	2,067	798	Thimphu
Tongsa	BT.TO	32	BT21	13,419	1,807	698	Tongsa
Wangdi Phodrang	BT.WP	24	BT22	31,135	4,046	1,562	Wangdi Phodrang
20 districts				672,425	40,994	15,828
HASC: Hierarchical administrative subdivision codes. ISO: District codes from ISO 3166-2. For full identification in a global context, prefix "BT-" to the code (ex: BT-23 represents Punakha). FIPS: Codes from FIPS PUB 10-4, a U.S. government standard. Population: 2005-05-31 census. Total includes "floating population".

Further subdivisions:

See the Gewogs of Bhutan page.

There are four zones, Western, Central, Southern, and Eastern. Their ISO codes are 1, 2, 3, and 4, in that order. To determine which zone each district is in, take the first digit of its ISO code. Exceptions: Gasa is in the Central zone, and Tashi Yangtse is in the Eastern zone. The districts are further subdivided into 196 gewogs, or blocks of villages.

Change history: 

1. 1949-08-08: India restored an area of 83 sq. km. around Dewangiri, which it had annexed in 1865, to Bhutan. It is now part of Samdrup Jongkhar.
2. ~1964: National capital moved from Punakha to Thimphu, through a transition period when Punakha was the winter capital and Thimphu the summer capital.
3. 1965: Bhutan had nine penlop (provinces): Byakar, Dukye, Ha, Paro, Punakha, Tagana, Thimbu, Tongsa, and Wangü-Phodrang.
4. 1987: Gasa district split up among Punakha and Thimphu; Chhukha district formed from parts of Samchi, Paro, and Thimphu.
5. 1988: Four dzongde (zones) were created as an intermediate level between the districts and the country.
6. 1992: Gasa district split from Punakha; Tashi Yangtse district split from Tashigang. Other district boundaries changed.

Other names of subdivisions: 

1. Chhukha: Chukha (variant)
2. Chirang: Tsirang (variant)
3. Daga: Dagana, Tagana (variant)
4. Geylegphug: Gaylegphug, Gelephu, Sarbhang, Sarpang (variant)
5. Ha: Haa (variant)
6. Lhuntshi: Lhuentse, Lhuntsi (variant)
7. Mongar: Monggar, Mongor (variant)
8. Paro: Rinpung (variant)
9. Pemagatsel: Pemagatshel, Pema Gatshel (variant)
10. Punakha: Punaka (variant)
11. Samchi: Samtse (variant)
12. Samdrup Jongkhar: Samdrup, Samdrup Jongkha (variant)
13. Shemgang: Zhemgang (variant)
14. Tashigang: Trashigang (variant)
15. Tashi Yangtse: Trashi Yangtse, Trashiyangtsi (variant)
16. Thimphu: Tashi Chho Dzong, Thimbu (variant)
17. Tongsa: Trongsa (variant)
18. Wangdi Phodrang: Andguphodang, Wangdue, Wangdue Phodrang, Wangdupotrang, Wangü-Phodrang (variant)