Below is a brief account of a tradition dating back approximately 500 years – finding the Dali Lama. Apparently, 14 Dali Lamas have been "found" under similar circumstances since 1474.

Was a similar search conducted after Gurdjieff's passing?

The Dalai Lama is not technically chosen; rather, he is found. But to understand how it works, you first have to learn the basics of Tibetan Buddhism and its belief in reincarnation.

According to Tibetan Buddhists, when ordinary people die, they exercise little control over their own reincarnation, since that is governed by their karma.

...However, there exist an enlightened few that have transcended the sway of karma through their devotion to complete compassion for all sentient beings. Among these enlightened are a number of superior Bodhisattvas, called tulkus, who control the time and place of their future births. The most well known tulku in the world is the Dalai Lama.

Back on Earth, a committee of sorts comprised of High Lamas and Tibetan governmental officials begin the search for the reincarnated tulku by consulting the Nechung Oracle, the official seer of Tibet. In the past, the High Lamas next traveled to Lhamo Lhatso, made sacred to the Dalai Lamas by the promise of a spirit who resided there, Palden Lhamo, to protect their reincarnation. There, the High Lamas meditated beside the lake and experienced visions and dreams that guided their search. If the Dalai Lama had been cremated, the direction the smoke blew was also noted with great interest. Typically, it takes two to three years to find the reincarnated Dalai Lama, although with the latest, the 14th, it took four.

When the High Lamas believed they had found the reincarnated Dalai Lama, they conducted a simple test. Several articles, only some of which were owned by the previous Dalai Lama, are placed in front of the child. If he chooses the correct items, this is read as a sign, along with the previous signs and some set of secret signs, that he is the tulku.

Next, three of the former Dalai Lama’s servants who knew him well are asked to confirm the child’s identity; other officials are also required to sign off on it, too. If more than one boy is identified in this manner and a clear choice cannot be made, the names are placed in a vase, and the name drawn out is that of the person that will become the next Dalai Lama.

Upon formal confirmation, the Dalai Lama is traditionally taken with his family to the Drepung Monastery in Lhasa to begin his studies. Except for the 4th Dalai Lama, who was born in Mongolia, the Dalai Lamas were all born in Tibet.

If should be noted that the procedures for finding and identifying the Dalai Lama can be changed if approximately two-thirds of the Tibetan people decide they need changed.

From: How the Dalai Lama Is Chosen