History of Pala dates back to the Sanghaya period, when, it is believed, that a few Brahmin families settled in Pala.
The first settlements were known in connection with the cultivation of spices, especially tamarind. Even now the 'Pala tamarind' is world famous.
Pala had contacts with the outside world long ago. An Armenian had an important role to play in the establishment of the Lalam Church (New) in 1663 A.D. The contacts with the outside world were mainly for commerce. It is assumed that the jungle route to Gudalloor through Pala, Bharananganam or Aruvithura brought a lot of 'Vellala Chettiyar' people from Tamil Nadu, for trade.
There are many legends about how this region became known as ' Pala'. Pala is believed to be an old time holy place of Hindus. The very word Pala was derived from 'Palazhi' the mythological Ocean of Milk from which nectar was churned out.
It is also believed that the word comes from ‘Palathu Chethyar' families the then prominent settlers of the region. Another school maintains that the first group of Christian settlers who came from 'paloor' was instrumental in christening the place 'Pala'. According to another school, the 'palayam' ( fort) of the Meenachil Karthas (the ruling family ) was situated in the region and so the name Pala got established. The first Kartha families were known as 'Njavakattu Karthas'.
Pala was the headquarters of the Meenachil region. 'Meenachil derives its name from the famous Meenachil river. It is believed that the famous Pala market was established in 1736. It is then Meenachil Karthas, who decided to allot a place to the Christians to form a market in and around the places where the present Government hospital is situated. It is believed that later a 'Meenakshi' temple was established somewhere on the shores and over centuries, the holy abode of Meenakshi became known as Meenachil.
The Athirampuzha, Erattupetta Road was established in 1868. The Pala, Thodupuzha Road became operational in 1893.
Buses started plying the Pala-Kottayam route in 1920 . Pala became a municipality in 1949.