It was the administrative center and de facto capital of the LTTE (Tamil Tigers)[2] until 2 January 2009, when troops of the Sri Lankan Army recaptured the city.

The town again fell into the LTTE's hand in September 1998 who held their administrative hub there until retreating during the Battle of Kilinochchi on 2 January 2009.

[5] Several institutions of the LTTE were forced to relocate from Kilinochchi to Tharmapuram, a town about 13 km in the east, by early October, 2008 in fear of death by advancing government troops.

However, the economy of the town has suffered in recent times due to the economic crisis, which has resulted in a lack of fertilizer and fuel, reducing crop yields.

Uthayan is highly critical of inappropriate land acquisition in the Jaffna peninsula and the Vanni region by the Sri Lankan Military and Government.