There are various versions regarding the origin of the place name. According to one, Pala gets its name from Palazhi (Ksheera Sagara), the mythological ocean of milk from which nectar was churned out. Another view is that the name was derived from Palathu Chettiyar families, the prominent early settlers of the region.

Pala was ruled by Meenachil Karthas (Hindu Local Chieftains) for a long time. The first royal Kartha families were known as Njavakattu Karthas.Pala has the largest propotion of Chrisitans in Kerala. Early settlements in the region date back to 1000 AD. Christian settlers came to the area very early, probably at the invitation of the local rulers.

The first four Christian families were THARAYIL (tharayil mappila) KOOTTUMKAL (brother of Tharayil Mappila) ERAKONNI & VAYALAKOMBIL .They engaged mainly in agriculture and trade. It is believed that Pala market was established around 1736 on the banks of Meenachil River by Christian settlers on the land allotted by the rulers Meenachil Karthas.Today it is the land of Latex ( Rubber Pal) and the name Pala is relevant even today.