As of 2011 it is the second most populous district of Himachal Pradesh, after Kangra.
Mandi district was formed after the merger of Mandi State (Mandi) and Suket, two princely states on 15 April 1948. This coincided with the formation of the Union territory of Himachal Pradesh. It is to be mentioned that the state attained its full statehood later. Mandi town was named after its resident saint Mandavya Rishi.
Mandi District is situated almost at the geographical centre of Himachal, lying along the left bank of the river Beas in the foothills of Shivalik ranges. The town of Mandi has an altitude of 760 metres (2,495 ft) from the sea level. Comprising the two erstwhile states of Mandi and Suket, Mandi derives its name 'mandi' or 'market' as it was a major trade route from Ladakh to various locations in Punjab such as Hoshiarpur and other places. Here, during the days of yore, the pious rishi, Mandavaya, performed long and severe penance and practised austerities on his body, on the bank of the river Beas, near the present Mandi town.
Mandi district is built along the banks of the Beas. It has long been an important commercial centre, and the sage Mandvya is said to have meditated here. This one time capital of the princely state of Mandi is a fast developing town that still retains much of its original charm and character. Today, it is a district headquarters. Mandi is renowned for its 81 old stone temples and their enormous range of fine carving. Because of this, it is often called the "Varanasi of the Hills'.
The town of Mandi District also has the remains of old palaces and notable examples of 'colonial' architecture. Mandi is the gateway to the Kullu valley and acts as the base for several exciting excursions. Bhootnath Temple synonymous with Mandi and located in its very heart, this is as old as the town itself, and dates back to the 1520s. The history of Mandi is very interesting from its beginning. In March, the festival of Shivaratri is a major event and the Bhootnath temple is its focus. For and entire week the town celebrates the arrival of hundreds of local deities on elaborately decorated palanquins.