The early history of Pala is closely tied to the Meenachil Karthas, a lineage of local chieftains who ruled the region before it was absorbed into the Kingdom of Travancore by Marthanda Varma in the 18th century. The town's historical trajectory was forever altered by the migration of Syrian Christians from the surrounding regions of central Kerala. These early settlers cleared forested lands and initiated extensive agricultural practices, laying the foundation for Pala's agrarian wealth.
During the colonial era, Pala grew into a prominent market town for spices, timber, and later, natural rubber, which was introduced by the British in the early 20th century. The town's residents quickly adopted rubber cultivation, transforming the local economy.
Pala was officially constituted as a municipality in 1947, coinciding with India's independence. In modern history, Pala became a focal point of Kerala's political landscape, serving as the birthplace of the Kerala Congress party. The town was represented in the Kerala Legislative Assembly by the late K. M. Mani—one of Kerala's most prominent politicians and longest-serving legislators—for over 50 consecutive years.