Dali is the ancient capital of both the Bai kingdom Nanzhao, which flourished in the area during the 8th and 9th centuries, and the Kingdom of Dali, which reigned from 937–1253. Situated in a once significantly Muslim part of South China, Dali was also the center of the Panthay Rebellion against the reigning imperial Qing Dynasty from 1856–1863. It was severely damaged during an earthquake in 1925.
Dali is located on a fertile plateau between the Cangshan Range to the west and Erhai lake to the east. It has traditionally been settled by the Bai and Yi minorities. It is also the capital of the Dali Bai Autonomous Prefecture.