The Palani Hills derive their name from the ancient temple town of Palani located at the northern base of the hills.
In 1906, the great undulating plateau on top of the Palanis comprising four forest ranges were consolidated under the Indian Forest Act of 1878 and designated by the British Government as a single reserve forest, from Kodaikanal town to the Kerala state border in the west and the Bodinayakkanur town limits to the south, and given the name of the Ampthill Downs. It was over 53sqmi in extent and about one quarter of it then consisted of sholas and three quarters was open, rolling, grassy downs.
The Ampthill Downs area is now named Upper Palani Shola Reserved Forest and totals 145.7km2 (36,000 acres) of forest land. It is the largest reserve forest division in the Palani Hills. The core of the proposed Kodaikanal Wildlife Sanctuary awaiting government notification is located in this division.
In 1988, the new 50km2 Kodaikanal-Berijam Wildlife Sanctuary was included in the protected area proposals considered to be of national priority status by the Wildlife Institute of India.
In the early 1990s, the Tamil Nadu Forest Department submitted a proposal to the State government to protect much of the Palani Hills by declaring the area a wildlife sanctuary or a national park.
The proposed park area includes only reserve forest land. These forests are already among the protected areas of Tamil Nadu. Their upgrade to Wildlife Sanctuary and National Park will increase their IUCN status from level VI - Protected Area with Sustainable Use of Natural Resources to IV - Habitat/Species Management Area or II - National Park and improve the habitat and wildlife conservation of the area.
The sanctuary has been under consideration of the Government of India in consultation with the Government of Tamil Nadu since 1999. The actual park boundaries have not been finalized. In 2007, proposals for declaration of Kodaikanal Wildlife Sanctuary were under consideration of the Government.
On August 13, 2012, in an apparent change away from plans for notification of parts of the Palani Hills as a separate wildlife sanctuary, the Tamil Nadu Gazette notification attached parts of Kodaikanal and Dindigul divisions of reserve forests to the buffer zone of Annamalai Tiger Reserve. About 5155.42 hectares of forest land belonging to Palani Hills Northern Slope, Andipatty reserve forest, 4,344.53 acres in Kudraiyar block forest and 5,548.49 hectares in Mannavanur Range in Kodaikanal will be included in the buffer zone. The villages and hamlets that now form part of the Palani Hills buffer zone are Poondi, Mannavanur, Kilavarai, Polur, Kavunchi, Kumbur, Kilanavayal, Kukkal, Pazhamputhur and Puthurpuram.
The increasingly important economic role of Eco-tourism, including: trekking, hiking, camping, mountaineering, rock climbing and bird watching may help the local populace to welcome this new Protected area. It remains to be seen whether the Wildlife Sanctuary and National Park will stimulate or stifle commercial development and tourism. The decision to finally establish the park must balance short term financial benefits of the status quo versus long term stability of the natural and human community.