Narowal District takes its name from its headquarters’ town. It is divided into three tehsils i.e. Narowal, Shakargarh and Zafarwal. Before being given the status of a district, both Narowal and Shakargarh were the tehsils of the district Sialkot. In 1991, Narowal District was created comprising Narowal and Shakargarh tehsils. Before independence of Pakistan, Shakargarh town was the headquarters of Tehsil Shakargarh, which formed part of Gurdaspur District. Under the Radcliff Award, Shakargarh Tehsil was transferred to Pakistan and attached with Sialkot District. Then in 1991, Shakargarh was attached with Narowal District. Later, in July 2009, Tehsil Zafarwal was created. At present, Narowal is functioning as a separate administrative district with effect from July 01, 1991.
There are several theories to the origin of its name. The most famous of them quotes that it was named after a Sikh landlord Naro Singh who was owner of this land before partition of subcontinent in 1947. Narowal City is situated approximately 50 km away from Indian occupied Kashmir and is famous for the production of rice and most specifically for the aroma of rice produced. According to a legend, the town Narowal was founded by one Baba Naro Bajwa 900 years ago. The town was, then surrounded by 22 villages inhabited by a Jat clan only, known as Bajwa.
Syed Habib Shah son of Inayat Ullah Shah assisted Naro in development and establishment of the town. He brought and settled a big chunk of population of Arain and Kamboh castes. Baba Naro occupied the northern portion of Narowal and Syed Habib Ullah Shah and his followers consisting of various Muslim clans inhabited its southern part. During the Sikh regime, Sikh sardars took hold of major part of fertile land and annexed Narowal town to Rayya Khas Tehsil of District Amritsar whereas Shakargarh town was headquarter of Tehsil Shakargarh and formed part of Gurdaspur District. Under the Radcliff Award, Shakargarh Tehsil was transferred to Pakistan and attached with Sialkot District. Previously Zafarwal and Rayya also used to be separate Tehsil Headquarters. In 1927, some adjustments in the territorial jurisdiction of tehsils and districts were made and Narowal came into existence as the Tehsil Headquarters including Zafarwal and Rayya. In 1991, District Sialkot was bifurcated and Narowal became the capital of the newly formed Narowal District.