War on terrorism, as the motto which formed the cornerstone of global policies of former neo-conservative administration of the United States, is increasingly becoming ineffective in Afghanistan with the dreaded consequence of spilling over into Pakistan. This inevitable consequence of War on Terrorism in Afghanistan has brought the West face to face with the ‘nest of terrorism’ that CIA built in Pakistan’s so-called madrasas of extremist Wahhabi teachings in the first place, with the enthusiastic assistance of Nawaz Sharif’s government in Pakistan, the Al-Saud of Saudi Arabia and the Al- Nahyan of the United Arab Emirates in late 1990s. In their evil planning they found it necessary to invent a state history for Afghanistan based on former British colonial designs for the region during their geopolitics of Great Game with Russia in 19th century. They invented the Afghan state by putting together territories they severed from the veining Persian Empire of the time. This process of state-manufacturing in Afghanistan though served the colonial purposes at the time, never proved to be working in the sense that is expected of a genuinely founded nation and nation-state. The ills of this ill-designed state will naturally disallow any remedy that is not based on a genuine state-building process in that country. To produce such a remedy Afghanistan needs to address the ills of its statestructure by pinpointing the centrifugal forces that drives various ethnicities apart and to try and find some kind of accommodation among components that makes up the state of Afghanistan. The best method to achieve this in today world of politics would probably be a genuinely designed federalism.