The state consisted of two clearly differentiated areas: Low Keonjhar, a region of flat river valleys — the main river being the Baitarani, and the High Keonjhar, an area of forests dominated by mountain ranges with the Gandhamadan reaching a height of 1078 m. The capital was at Keonjhar.

[2] According to traditions, Keonjhar State was founded during the 12th century rule of the Eastern Ganga dynasty when the founder Jyoti Bhanja of the Bhanja dynasty, who was the brother of Adi Bhanja of Mayurbhanj, was enthroned as the Raja of Keonjhar with the help of the dominant local Bhuyan clans.

The influence of the Bhuyans on the enthronement rituals and regnal traditions of Keonjhar suggests a long-standing relationship with the kingdom.

[3][4] Around the 14th century, a prince from Keonjhar named Ananga Bhanja, who was a nephew of the Raja of Keonjhar was named the king of Baudh by the local chieftains under Ganga rule.

The Keonjhar royal family adopted the emblems of the neighbouring State of Mayurbhanj, a peacock and the yellow and blue colours.