As far as we know, the first people who inhabited the Lesotho area were
the Khoisan (San) hunter-gatherer people, although they gave way to Bantu-speaking peoples who moved
into the area several centuries prior to the Scramble for Africa and intermarried with the Khoisan starting in the sixteenth century CE. These
Bantu-speaking peoples diverged and split into many little ethnic groups
during the centuries until the rise of the Zulu in 1816-1830. This was a
fairly disruptive time for everyone, primarily because of pressures brought by the expansion of white trade and the Zulu state, and the rich
multifaceted ethnic fabric gradually boiled down to just two groups, the
Zulu and the Sotho.
The Sotho were made up of the remnants of all the non-Zulu ethnic
groups in the area and were led by a fellow named Moshoeshoe the Great, who came to
power in 1820. He had a stronghold at Butha-Buthe, although he later moved to a mountain called Thaba-Bosiu near the modern-day capital Maseru. Now Moshoeshoe was a commoner at first, but he had a good head on
his shoulders and managed not only to fend off the Zulu raids but also to
preserve the Sotho's independence from both British and Boers, both of whom attempted to attack his fledgling state at first. As a result, he effectively managed to establish himself as king and the head of the Lesothan dynasty. He did,
however, let Catholic and Protestant missionaries into the area for some
reason, despite his other protective measures. This independent existence could go on for only so long, though,
and as a result of wars with the Boer Orange Free State in 1858 (which he won) and 1865 (in which much western territory was lost)
he was finally obliged to ask the British for protection.
The new British protectorate was named Basutoland and quickly had home
rule taken away in 1871 (Moshoeshoe couldn't help; he had died the year before) when it was annexed to Cape Colony without any
form of Sotho consent. Thirteen years later the situation improved
marginally when Basutoland was instead placed under direct British rule,
thereby ensuring that at the very least its concerns would not find
themselves subsumed under those of a much larger, attached territory. In
1910, when the British formed the Union of South Africa, Basutoland came
under the jurisdiction of the British high commissioner in South Africa
and it was expected that Basutoland would eventually be absorbed as a homeland. The Sotho of Basutoland, though, had no interest whatsoever
in becoming part of South Africa. The South African Nationalist party, the
main proponents of apartheid, were gaining in power and the Sotho were
smart enough to see the metaphorical writing on the wall, so they said,
"To hell with this bullshit." The Basotholand National Council was formed in 1910 as an official advisory body and it asked for official independence in the 1950's.
Basutoland remained more or less independent of South Africa after that despite its being totally surrounded
until the process was greatly helped along by Britain's granting it a new
constitution in 1960. This constitution was intended to pave the way for eventual internal self-government. Basutoland was granted full independence under its modern name, Lesotho, on October 4, 1966. In 1970, Prime Minister Leabua Jonathan suspended the constitution when the opposition party, the Basutoland Congress Party (later renamed the Basotho Congress Party but retaining the BCP acronym, obviously), led by Ntsu Mokhehle, won the general elections. King Moshoeshoe II was forced to leave the country in exile but at the end of the year returned, although his power was reduced to that of a figurehead.
The troubles with the BCP went on for quite some time. The 1973 constitutional rewriting convention was marred by the BCP's total refusal to attend. Prime Minister Jonathan was quite upset about this and he accused the BCP of staging a coup in 1974, outlawing it as a result and possibly executing many hundreds of its members. The BCP hurriedly realized that this battle wasn't to be won in the legislative arena and mobilized their militarized segment, called the Lesotho Liberation Army, who clashed with governmental forces throughout the 1970's and 1980's.
In the meantime, the Prime Minister really wasn't making many friends. He exploited popular hatred of South Africa and its policy of apartheid to build his own popularity, but this backfired when South Africa responded with economic blockades (especially effective since Lesotho is completely surrounded by South Africa) and military raiding expeditions. Tired of constant governmental mismanagement by Jonathan, Maj. Gen. Justinus Lekhanya led a coup in 1986 which intended to install then-figurehead King Moshoeshoe II as the real head of state. This didn't really work out that well in the end since Lekhanya and Moshoeshoe fought constantly over power, eventually bringing about a second exile for Moshoeshoe II. His son Letsie III took over the kingship in 1990, but he too was reduced to a purely ceremonial role. Lekhanya retained effective power until a bloodless coup in 1991 overturned him in favor of a six-man military council chaired by Col. Elias Tutsoane Ramaena, who then took on effective power. Free elections were held in 1993 for the first time in 23 years, and the outcome was much the same as the last time. The BCP became the ruling party and Ntsu Mokhehle became the new Prime Minister.
There was fighting in 1994 between two rival factions within the army, and as a result the king ousted Ntsu Mokhehle from office but then was pressured to reinstate him by other nations within the region. Parliament was also dissolved in October by Letsie, who said that the people really didn't want the BCP--nevermind that they elected them--they wanted Letsie himself to just handle both the legislative and executive functions of the government. So that's what he did. Then, in 1995, King Letsie, either bowing to foreign criticism or just trying to confuse anyone who might be trying to set down a comprehensive history of Lesotho, abdicated the throne in favor of his father Moshoeshoe II and restored constitutional rule. Moshoeshoe died a year later in a car accident, once again restoring Letsie III to the throne.
As if all the king-switching business weren't difficult enough, the party politics situation chose this time to get substantially more complicated, as well. Ntsu Mokhehle decided that he would break with the BCP in order to create the Lesotho Congress for Democracy party in 1997. This meant that the BCP dropped substantially in importance and the new party ascended rapidly, especially since its head was a demonstrably popular fellow who had a modicum of power to begin with. This popularity didn't keep Mokhehle from dying in January of 1998, though, freeing up the way for Pakalitha Mosisili of the LCD to be elected PM in May.
Demonstrators apparently didn't like this at all, and shouting about election fraud they held some really nasty protests in the capital city of Maseru, really trashing the place. South Africa, Zimbabwe, and Botswana sent troops into the region in September of that same year in order to restore order. Order having been restored, the two sides agreed to meet so that they could set up free elections within 18 months. However, that hasn't happened yet. They set a new deadline in 2001 when the 2000 one passed, but there were still no elections held. It's thought that they might take place in 2002, but the political situation is getting more and more tense all the time, especially with the incredible unemployment rate (40-45%) and the generally poor economic situation in which the country finds itself due to its commercial infrastructure having been shattered in all the recent unrest.
Sources: http://www.encyclopedia.com/html/section/lesotho_history.asp
www.lonelyplanet.com/destinations/africa/lesotho/history.htm