The area now comprising district Kotli was a sub-division of Mirpur district up to the year 1975. Prior to 1947, it was a part of the Jammu area. Kotli is a hilly area rising gradually towards the high mountains of Poonch district. Its climate is more moderate than that of Mirpur due to the sub-mountaneous topography. The river Poonch passes through Kotli to be joined by a smaller river called the Baan at Brahli, a short distance from Kotli.
The district headquarter is at a distance of 141Km from Islamabad (capital of Pakistan). It is linked with Mirpur by two metalled roads, one via Gulpur and Rajdhani, and the other via Dhungi and Charohi. It is also directly linked with Islamabad/Rawalpindi via Sehnsa and Holar. Kotli has basic facilities like a main bazaar, banks, hospitals, colleges, telephone and telegraph office and hotels.
There are two theories about the origins of the name of Kotli. One school of thought claims that in ancient times, Prince Raja Shahswar Khan built a small residency here and called it Kot later to be adopted as Kotli. An another theory states that the name is derived from the Sanskirit word Kotli which means to reside or take up residence. At one stage the area was inahbited by the Mangran and Solhan people and was called Kotli Solwhan, later to be called just Kotli.
Kotli, is a district of Azad Kashmir. The city is famous for its mosques and is often descirbed as Madina-tul-Masajid.
Kotli is well known for its Mosques and is often referred to as Madina-al-Masajed. Aghaar Sharif, consisting of a large Mosque and a Shrine (of the late Qazi Fateh Alam), under the guidance of Hazrat Sahib, is a large complex on the outskirts of the city. Hazrat Sahib (Sahbzada Mohammed Sadiq) is well known for building Mosques, Madersas and providing Islamic education and spiritual guidance throughout the Kotli and Mirpur districts. Hazrat Sahib can only be seen at the Friday prayers as he is engaged in worship in seclusion at all other times.