The legend states that Chanda and Munda, the two demons of the demon king Shumbh Nishumbh had dared to harass Ambika. This resulted to a battle between the gods and the demons. It is said that Chamunda emerged as Chandika from the eyebrows of goddess Ambika and she was assigned the task of destroying the demons. Chamunda was successful in killing those two demons and had presented goddess Ambika the heads of those two demons. Ambika being pleased with the act of Chamunda named a city after her and from then Chamunda Devi is worshipped as an epitome of courage and power. According to another legend, Goddess Chamunda was enshrined as a principal Goddess with the title of Rudra, in the battle between demon Jalahandhara and Lord Shiva, which has made this place legendary and is known by the name 'Rudra Chamunda'.
As per history the Chamunda Devi Temple had been built 700 years ago. Apart from the holy deity of goddess Chamunda covered in a red cloth, the temple complex comprises a pool or a 'kund' in it. The devotees consider a dip in the pond sacred. At the back of the temple there is a cave-like scoop. It represents the stone lingam, which is an embodiment of Lord Shiva. Within the temple are depicted scenes from Devi Mahatmya, Mahabharata and Ramayana. The image of Bhairo and Hanuman are found on either side of the deity.
Many devotees gather in the temple to offer prayers to their ancestors. They believe that a dip in the Ban Ganga will assure them a state of spiritual peace. People from 22 villages use the temple area as their cremation ground because they consider the place as a sanctified ground. At the same time the atmosphere around the temple is one of serenity and solace. For many people, the Chamunda Devi Temple is an ideal meditation ground.
Just beside the temple there is a Sanskrit College, an Ayurvedic dispensary and a library. The dispensary caters to the need of the pilgrims and the inhabitants. The college holds classes on Vedas and Puranas. The library houses various old manuscripts on Sanskrit books, the Vedas and the Upanishadsand also sales these books at a reasonable rate to many pilgrims.
The temple can easily be reached by hiring taxis from Dharamshala or Palampur. Even state transport buses ferry passengers to the temple area at regular intervals. Thus, Chamunda Devi Temple stands as a seat of devout religiosity in the lap of the stalwart hills of Himachal Pradesh.