There are countless small eating places serving local fare, apart from Continental and Chinese, and almost all uniformly good. Be adventurous and sample local fare instead of playing safe. Try chewing on a piece of churpi - its yak cheese, one of those 'need to acquire a taste for it' things, but once you do it, its great. As for what to drink, there's rarely a restaurant in Sikkim - it's always a 'restaurant cum bar'.
The liqueurs produced by Sikkim distilleries are delicious and make great gifts. Go for old favorites like creme de menthe, or try spicy ginger and cardamom . try the paan liqueur, which comes in a betel leaf shaped bottle.
The Sikkimese love to spice up their simple meals with piquant or hot pickles. Jhekar, a chutney made from fiery red or green peppers (called dallay) that grown in the mountains. Milder but with a tart flavour is lap se chutney, made of sour wild berries, while for a tangy touch, there is dho-tender bamboo shoots in mustard oil. Immensely popular is chhurpi, a fermented, dried cheese prepared from cow or yak milk. Fish, chicken and pork pickles are also favored.
No visit to Sikkim is complete without a tumbler of chhang, the popular local beer made from fermented millet (the word actually means 'home-brewed' so there are variants made from rice, maize, wheat and cassava).
With a dough made from rice, water, milk and sugar, the fried pretzel-shaped rotis are served with spicy potato curry or pakku (Sikkim's mutton curry). Good chance of sampling it during festivals like Losar.
Ningro is a fern that grows in the mountains, and its tendrils are delicious when sautéed with chhurpi. A household staple, ningro chhurpi is not widely available in restaurants, but if you choose a home stay, you can usually sample it.