Dhankar was the traditional capital of the Spiti Valley Kingdom during the 17th century and has some features dating back to the 12th century. It was the seat of the early rulers of Spiti, the Nonos, who had the right to cultivate the government lands nearby and were required to keep the fort in repair. They also dispensed justice to the people and were noted for their harsh penalties until the British replaced them.[1]

The monastery is also referred to as Lhaöpé Gönpa (Wylie: lha 'od pa'i dgon pa):

Lha-'od seems to be the local pronunciation of Zla-'od, the name of a famous lama who was born in 1121, according to the Reu-mig. Zla-'od-pa would then mean "a follower of Zla-'od." He is apparently the founder or renovator of the monastery which now belongs to the Gelugpa order. The monks assert that it was not only of earlier origin than the Tabo monastery, but also earlier than Srong-btsan-sgam-po. They have, however, nothing to show of any really ancient relics. They explain this fact by stating that the monastery was plundered many times, lastly during the Dōgrā war [...][2]

A new Teaching Temple was inaugurated by the Fourteenth Dalai Lama on 12 July 2009.