Manali is a small town. People from different parts of India have settled here. As of 2001 India Manali had a population of 6265. Males constituted 64% of the population and females 36%. Manali had an average literacy rate of 74%, higher than the national average of 59.5%: male literacy was 80%, and female literacy was 63%. In Manali, 9% of the population was under 6 years of age.
In ancient times, the valley was sparsely populated by nomadic hunters known as 'rakshas'. The next arrivals were the shepherds who arrived from the Kangra Valley and settled to take up agriculture. Some of the earliest inhabitants of the region are the 'naur' or 'nar', which is a caste unique to the Kullu valley. Only a few naur families are known to exist now. A naur family in the village Soyal near Haripur on the west bank of Manali was famous for the vast land they owned and their practice of having 'rakshas' as their labourers.