Bada Hakim, the feudal district which governed the whole north-eastern region. The town also held the regional jail and army post. Because of Dhankuta's isolation from the lowland Terai and from Kathmandu, it was in many ways a self-governing area.

Income to purchase items (cloth, kerosene, batteries, medicines, etc.) that could not be produced locally came from a combination of sales of hill produce (tangerines, potatoes, etc.) and funds