The district of Kandhamal made up of two subdivisions - Phulbani and Balliguda has the district quarter at Phulbani. The region of Kandhamal is an abrupt hilly tract, which forms an endless series of valleys varying in size. The small hamlets dotted throughout the district are covered with thick impenetrable forest and the winding streams and torrents intersect the hilly tract. This untamed hilly tract owes its significant importance from the past history, which dates far back in 3rd century B.C., when it was considered as an unconquered Atavika country. The legendary Kalinga Rock edicts, excavated in the wide region of Kandhamal, utters the verity that the district of Kandhamal was under the Mauryas were at the helm of administration in Atavika country. The mountainous Atavika country in the later years came to be identified as the Kandhamal. In the later years, following the available historical records of the Kandhamal, some historians have opined that the district is named after the vigorous Khonds, who used to dwell the land.

Though the region of Kandhamal survived in the 3rd century A.D, it attained spotlight in the map of Orissa, during the Dakshinapatha Campaign of the Gupta ruler Samudragupta in the 4th century. As the history of Khandamal runs, Samudragupta led his victorious army to the south from Kosala and Kural through this district and defeated some kings in Ganjam. This region unquestionably encompassed the Kandhamal region, of which the Guptas had their absolute dominance for a couple of years.

However the historical documents of Kandhamal so far are revealed do not demonstrate the socio-economic and political condition of Kandhamal aftermath the Guptas. The region of Kandhamal was in complete obscurity before the arrival of the Bhanjas as the sovereign authority of Orissa. The present district of Kandhamal is made up of the fragments of the three erstwhile principalities of Boudh, Ghumsar and Khemundi, which were formed during the reign of the Gangas, the last indigenous rulers in the throne of Orissa. The contemporary history of the Kandhamal district is documented with the arrival of the British in the nineteenth century.

As far the history of Kandhamal is concerned, the British were not successful enough to find their way out without confronting any resistance. Bhanjas occupied this state in the 9th Century and continued to rule over it till 1835. Ganjam came under the Britishers in 1765. Though in the beginning the Bhanjas did not put up any aggressive interference in the activities of the British, in the later years, the growing dissension among the two powers were noticed as the historical records pronounce. Finally they raised the banner of revolt frequently against the British. The Kandhas and the Paikas forming the Ghumusar army waged relentless wars under the able leadership of Dohara Bissoyi from 1815 to 1835.

In the later years, deposing Dhananjay Bhanja on account of his habitual defiance, the British occupied Ghumusar on November 3,1835. Dhananjay Bhanja died at G.Udayagiri in December of the same year as a fugitive.

The history of Kandhamal depicts that the present subdivision of the Kandhamal district, Balliguda region was under the Gangas of Kandhamal, most probably from the 10th Century and the dynasty ruled over these hilly tracts till the 19th century, till the British captured the area in 1830 to 1880, by subduing the hilly chiefs, who were the supporter of the Gangas. As it is deciphered from the historical records, Ghumusar and Balliguda region was uninterruptedly under the sway of the Bhanjas and the Gangas, respectively, for about a millennium. But Kandhamal, which was originally the part of the Boudh district, experienced a chequered history during the same period.

The present subdivision of the Kandhamal sub division was an integral part of Boudh till 1855. The earliest history of Kandhamal is collected from a number of copperplate inscription issued by the kings of the early Bhanja dynasty. Their kingdom was known as the Khinjali Mandala. From the 10th Century with the advent of British in this region, Boudh, including Kandhamal, has been governed in succession by the following royal dynasties: the Somavansis, the Chindak Nagas/Telugu Chodas, the Kalchuris and the Bhanjas. The history of Boudh-Kandhamal for 500 years prior to the coming of the British is however, still very vague. It was the Britishers, who fragmented the parts of Kandhamal from Boudh.

After the Britishers conquered the Uttar Ghumusar (G.Udayagiri area) and Uttar Khemundi (Balliguda area) these territories were placed under the jurisdiction of the Collector of Ganjam district. These areas remained under the direct control of the British until India attained her independence. Kandhamal, which was dissected from the Boudh district, functioned as a tehsil from 1855 to 1891 and Tahasildar under the direct control and supervision of the superintendent of the Tributary Mahals of Cuttack, managed all its administrative activities. In 1891, it was upgraded and merged with the district of Angul. In the post independence period when Ganjam was associated with the province of Orissa, Kandhamal became the subdivision of the Ganjam district. Again in 1949, the district of Kandhamal was amalgamated with Boudh forming the Boudh Kandhamal district, with the district headquarter at Phulbani. Finally the separation of Phulbani from the Boudh district, results in the formation of a separate functioning district of Kandhamal with the two subdivisions of Phulbani and Balliguda and the district headquarter in Phulbani.