Its a grave mistake from BRITISH SIDE. For their ADMIN purpose,They merged TAMIL KINGDOM(Jaffna, Northern and Eastern kingdom) of that tiny island with sinhalese kingdom and called it as CEYLON.
But these tamil kingdoms were part of INDIA and culturally these TAMIL KINGDOMS are well integrated with INDIA. It should have been part of india. Ofcourse those TAMIL KINGDOMS in that island are part of CHOLA KINGDOM. As you said NEPAL also should have been part of india. These are the mistakes done by BRITISH in INDIAN SUB-CONTINENT.
We have to act like Chinese to merge these territories back to INDIA.