In early times it is believed that there were hundreds of oracles throughout Tibet.
Today, only a few survive, including those consulted by the Tibetan government. Of these, the principal one is the Nechung oracle. Through him manifests Dorje Drak-den (Nechung), the principal protector divinity of the Tibetan government and the Dalai Lama (see History of Nechung Monastery). It is because of this that Nechung Kuten is given the rank of a deputy minister in the exiled Tibetan government hierarchy.
http://www.tibet.com/buddhism/nechung_hh.html -----
From Wikipedia
Pearlman (2002: p.94) frames the inauguration and installation of the tradition of the State Oracle by identifying key stakeholders: Padmasambhava, Samye, Vajrakilaya, Dharma, sangha, genius loci:
When Padmasambhava consecrated Samye Monastery with the Vajrakilaya dance, he tamed the local spirit protector, Pehar Gyalp, and bound him by oath to become the head of the entire hierarchy of Buddhist protective spirits. Pehar, later known as Dorje Drakden, became the principal protector of the Dalai Lamas, manifesting through the Nechung Oracle.
According to the Dalai Lama, "Tibetans rely on oracles for various reasons. The purpose of the oracles is not just to foretell the future. They are called upon as protectors and sometimes used as healers. However, their primary function is to protect the Buddha Dharma and its practitioners."
The rite of the Oracle possessing the kuten is ancient, entering the tradition from the Bonpo and Ngagpa, and traditionally involves a detailed evocative liturgy including such elements as fanfare, dance, mudra and mantra to invoke the Oracle who forcefully projects their mindstream via the discipline of phowa, temporarily possessing the physical basis.
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So is Nechung a Buddha? No a spirit bound by oath by Padmasambhava.
My understanding is, it is from advice from this state oracle (not a Buddha but a spirit), that the Dalai Lama has banned the practice of the Wisdom Buddha, appearing in the wrathful aspect of Dorje Shugden, because of the advise of a spirit, that claims Dorje Shugden to be not is not a Buddha but an evil spirit.
Whereas many great enlightened Gelupa lineage Gurus such as Kyabje Phabonkha Rinpoche, Kyabje Trijang Rinpoche, & Kyabje Zong Rinpoche and many others have taught that Wisdom Buddha Dorje Shugden is a Buddha, the embodiment of the wisdom of ALL Buddhas, appearing in a wrathful aspect to protect the Dharma & specifically the teachings of Je Tsonhkhapa and by managing the conditions of Gelugpa Practitioners who rely upon him to steer these practitioners along the most appropriate path to gain liberation and enlightenment for the sake of all living beings.
Why is it then that we who follow the path, laid open for us by this great Protector Dorje Shugden, the Wisdom Buddha, do not emphasise more the hypocrisy of someone who claims we are spirit worshipers, when he himself has taken this view, not from an enlightened being but from an oath bound spirit.
He who claims that we are not Buddhists because we follow and worship a spirit is, himself lead by the advice of a Spirit.
We as Buddhist go for refuge to the Three Jewels, Buddha Dharma and Sangha. Not to Buddha, Dharma, Sangha, and spirits (via their oracles).
It is Interesting to note that Geshe Kelsang Gyatso as stopped the use of oracles in the Western tradition of the New Kadamapa Tradition.