The word "Paralakhemundi" originated from the word "Prabalakhanda" which means piece of coral. With the time the same dithered into Paralakhemundi.
This area originally was under the Madra Presidency, a Princely State. There is no evidence, by historians to show that there was any Raja governing this Khemundi area. In 12th century the Kalachuris were in occupancy of Khemundi area. The war between the Gajapaties of Ganja Vansa and Kalachuries continue from 1110 till 1238. During the period of war Kalachuris were actually possession of this area. But in the war of 1238 the Kalacheris lost and Maharaja Anaga Bhima Deva reigned over this area as well as South Koshala.
So far as Paralakhemundi Dynasty is concerned the available data shows the first Jamindar was Narasingha Deva son of Kapila Deva who reigned 1245 to 1275 A.D..
Maharaja Krushna Chandra Gajapati Narayana Dev, who was the founder of the present day Odisha came into reigns in the year 1912 (through ceremonial coronation was done in the year 1905) after he won the legal battle in the court of wards.
The headquarters of Paralakhemundi Dynasty was originally located at Pathapatnam, presently in Andhra Pradesh and inscriptions and ancient documents transpires that the capital of Khemundi area was shifted from Pathapatnam to Paralakhemundi in between 1740 to 1751.
The topological location of Paralakhemundi Zamindary was confined in between 18 Degree 31 minutes and 19 Degree five minutes North in Latidue and 83 Degree 46 Minutes and 84 Degree 26 Minutes East in Longitude.
Paralakhemundi Zamindary was having 726 Revenue Villages out of which 526 was Zirayati and 220 were Inam Villages. By the order of British Empire in 1790 Lord Cornawallis declared for Permanent Settlement of Zamindary which process continued for two years i.e. 1802 to 1804 wherein the Royalty of Zamindary was 1/6, the Royalty of British Empire was 2/6 and the cultivator get 3/6. Then came the Land Settlement which continued in Paralakhemundi area 1830 to 1890. The said sharing of royalty caused much commotion and disturbance in the area causing revolution and Melees.