The town stands on a plateau on the right bank of the Ravi river valley between Dhauladhar and Zanskar ranges south of the inner Himalayas. This town was founded by Raja Sahil Varman when he conquered the lower Rani valley from the petty chiefs called Ranas and Thakurs in the beginning of 10th Century. It seems the original name of the town was Champa as mentioned in Kalhan's Rajtarangani. In the bansauli or genealogical rolls of the Chamba Rajas a reference occurs of place which was adorned with highly fragrant Champaka trees and guarded by Goddess Champavati or more popularly known as Chameshni. The temple was built by Sahil Varman in the honour of his daughter Champavati who is worshipped as a goddess in Chamba. Champavati temple became the family temple of the ruling family.
