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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.