Alfandagh, the Arabic term for this region, which means hospice, castle or frontier, or literally "a place of calm hospitality populated by peaceful or hard-working peoples".

[4] In a published work of João Manuel d’Almeida Moraes Pessanha: There are historical convictions that Alfândega, during Moorish occupation, was an administrative seat of some importance to a region referred to as Valiato de Aldandica.

[4] In 1385, King John forced the residents of Alfândega da Fé to rebuild the Torre de Moncorvo, probably an effort to gain the community's support of the Kingdom of Castelo during the Interregnum (1383–1385).

The municipality retains its 1898 limits, from the Serra de Bornes to the Sabor River, and from the plateau of Castro Vicente to the Vale da Vilariça.

Its Centros de Saúde (health centres), along with private initiatives, have made it one of the more dynamic municipalities in the country, providing local service without unnecessary trips to distant hospitals.

While the establishment of a municipal library and Casa da Cultura have assisted education within these communities, the area has also experienced a decrease in local enrollment, resulting in the closure of several smaller schools.

Although growth has been difficult (due to changes caused by market competition, the introduction of industrialization and lack of a national agriculture policy), most of its citizens still identify themselves as farmers.

[3] A number of handicrafts from the traditional culture of the region are locally produced: embroidery and quilt-making, basket-weaving, metal-smithing, shoe-making and sewing, which had been abandoned in the modernization of Portugal.

This reemergence of traditional handicrafts has, over the past decades, added to the tertiary sector of the economy, along with the expansion of commerce, hotels and small industries associated with tourism.

Tourism, although gaining importance recently in the region, has been aided by the construction of a modern hotel in the Serra de Bornes (Estalagem Senhora das Neves), new restaurants and the expansion of hunting lodges (for clubs, associations and huntsmen).