Manali is named after the lawgiver Manu. The word Manali is regarded as the changed name of "Manu-Alaya" which literally means "the abode of Manu". Legend has it that sage Manu stepped off his ark in Manali to recreate human life after a great flood had deluged the world. Manali is also often referred to as the "Valley of the Gods".
The British introduced apple trees and trout. The first apple orchard was set up by the British near Patlikuhl, which were earlier not native to Manali. It is said that when apple trees were first planted, the fruits were so plentiful that often branches, unable to bear the weight, would collapse. To this day, apple—along with plum and pear—remain the best source of income for the majority of inhabitants.
Tourism in Manali received a boost after the rise of militancy in Kashmir in the late 1980s. This once quiet village was transformed into a bustling town with many hotels and restaurants.