Bandipur was established as a funnelling point of trade by Newar traders from Bhaktapur in the Kathmandu valley after it had been conquered in 1768 by Prithvi Narayan Shah at the time of unification of Nepal. They took advantage of its malaria free location to develop it into an important stop along the India-Tibet trade route. With them they brought their cultural heritage and architecture which basically has remained unchanged to this day

Bandipur is located at an elevation of 1030m on a mountain saddle (Mahabharat range) approximately 700m above the Marsyangdi River Valley, 143 km to the west of Kathmandu and 80 km to the east of Pokhara. There is a 8km access road from Dumre along the Kathmandu-Pokhara highway in good condition. The mountain saddle, just 200m long, is barely wide enough to accommodate the main street lined by 2 –3 storey buildings on either side. Many of these houses have been converted into guest houses and resorts offering a wide range of products and prices suitable for all.