Panchkhal Municipality was established by a Ministerial level decision of the Ministry of Federal Affairs and Local Development on May 8, 2014 incorporating five erstwhile Village Development Committees. While the five VDCs were Panchkhal, Hoksebazaar, Devbhumi Baluwa, Anaikot and Sathighar Bhagawati, the decision of the Government of Nepal on March 10, 2017 established Panchkhal as a local federal unit after adding Kharelthok and Koshidekha VDCs into it. The total area of the municipality is 103 square kilometers while the total population is 42,011. Panchkhal, 45 km east of Kathmandu and 15 km southeast of Dhulikhel, has the largest flatland area in Kavrepalanchok district. Besides the fertile Panchkhal Valley, the municipality also has sloped land areas in the erstwhile Anaikot, Hoksebazaar, and Sathighar Bhagawati VDCs. Close to the national Capital, development of the economic, social and cultural aspects of the local level are influenced by the market areas. Agriculture, animal farming and trade are the traditional major occupations here. The agricultural and dairy items produced here are consumed mostly in the urban areas of Dhulikhel, Banepa and Kathmandu.

Hinduism, Buddhism, Christianity and Islam are the major faiths of the Panchkhal residents. Brahmins, Chhetris, Danuwars and Tamangs have sizeable populations here. Divided into 13 wards, this municipality has important historical, pilgrimage and touristic sites such as Palanchok Bhagawati, Dugdheshwari Temple, Suvarneshwari Temple, Kotdevi, Anaikot View Tower and Sunkoshi riverbanks.

Panchkhal Valley is surrounded by Palanchok, Anaikot, Raviopi, Jaishithok and Patlekhet hills. The municipality has geographical diversity with varying altitudes and topographical features. Monsoon is experienced in the summer and rainy seasons. This area receives plenty of rainfall due to the low pressure wind arriving from the Bagmati and Roshi watersheds of the district that fall in the rain shadow of the Mahabharat region.