The official founding of Caraga as a municipality was in October 29, 1903, under Organic Act 21, making it one of the oldest towns of the province of Davao Oriental.

The etymology of the word “Caraga” is named after the Kalagan people (Spanish "Caragan"), a Mansakan subgroup (related to Visayans) native to the regions of Davao and parts of Caraga who speak the Kalagan languages.

With religiosity, Caragans were spirited as to their belief on the spirits of nature (like the trees "balete tree", the rivers and mountains, sun and moon); in fact, they have "anito worship" and "ancestor worship" led by the dancing priestess (balyan) and the singing priestess (catalunan).

The municipality is located 254 kilometres (158 mi) from Davao City, the regional center of Region XI, and 84 kilometres (52 mi) from Mati, the capital town of the province of Davao Oriental on the island of Mindanao.

Household population by mother tongue (based on 1990 participation rate): Coconut products are the inhabitants main source of income aside from some lucrative business.

It has a number of eco-tourism resources like the Caraga Lagoon, San Luis Beach, Pusan Point, and some historical heritage like the San Salvador Church Bell from 1802, and the Caraga Fortification with 80 feet (24 m) high stone-built walls.

The municipality of Caraga has sixteen (16) wholesale trade establishment which are mostly involved in the buy and sell agricultural products.

Retail establishment, which includes repair/welding shops, dormitory, lodging houses, cable television, telephone services providers, total to 23, most of which are found in the Poblacion.