I am trying to georeference a raster map from Nepal. What CRS should I use? PROJ.4 or WKT form. I will use the UTM grid to base my reference points on.
On the map there is reference to: Scale 1:50000 Everest 1830 Spheroid Modified UTM Projection Origin Long 87E Lat 0N False Coordinates at Origin Easting 500000 Northing 0 Scale Factor at Central Meridian 0.9999
Centre of map is about 460000E 3080000N
After a bit of searching around and a tip from afalciano on needing the towgs84 transformation parameters I was able to use +proj=tmerc +lat_0=0 +lon_0=87 +k=0.9999 +x_0=500000 +y_0=0 +a=6377276.345 +b=6356075.41314024 +towgs84=296.207,737.545,273.001,0,0,0,0 +units=m +no_defs as the source coordinate system. This enabled me to use the UTM grid coordinates on the map to georeference.
There were a number of slightly different definitions that I found for the Everest 1830 datum as it has been revised over time. After some trial and error I ended up using the above proj4 definition from https://geonet.esri.com/thread/48571.
When the map was then transformed to be in the WGS84 coordinate system I found the roads and prominent features matched up very well with some GPS tracks I found elsewhere and OSM maps.
The method of using actual features on the map and matching up with the corresponding features on a known map such as OSM as detailed by Nitzan Matan would have also worked but I think at reduced accuracy
When you are Georeferencing in QGIS you need to adjust the raster to the CRS of your satellite map, the raster is without CRS it's just a photo at this point. Look at QGIS lesson for more explanation. I am using OSM maps, so when I am uploading the raster into the Georeferencer I set the CRS to WGS 84 / Pseudo Mercator projection. Now you need to mark location in the raster and then in the satellite map. Me advice is to find a location of a city like Chame in the raster and then use the GeoSearch plugin to find the same location in the satellite map.
From my experience in this kinds of map it is best to make at list ten points, to erase points with a long red line and scatter the point as much as passable.
For example would erase all of this points . 
Now you have to set the transformation settings (the yellow wheel icon). At first I used this ones 
and the map position was not accurate. 
Then I tried the Helmert transformation type and the map position looks much better.
I think that your main concern are the lacks of details that make it hard to much the exact location in the raster and in the satellite maps. It is pretty passable that you cannot make a perfect georeferenc especially if the raster maps are not accurate. On the other hand, I used only for points and it the map was in the general area, I am pretty sure that more points will make it much better.
