Palhi Vagwati in Nawalparasi district has a cultural importance. A king from Pal dynasty established a sacred place of Kalika Devi in this place. During the 16th century, Sen Dynasty of Palpa also lived here. And hence, this place was named Palhi after the Pal dynasty. Here, the administrative area of Palhi was established after the unification.

At some time, a clerk working in this place is believed to see a dream that told him to build a temple of Vagawati Devi with the golds and gems cremated under a Pauwa tree.