It is also the seat of West Macedonia's court of appeal, police department, fire brigade, the seat of the 1st Army Corps of the Hellenic Army and of the Bishop of Servia and Kozani.One of the most important aspects of local folklore is Kozani's carnival at the end of the winter, which retains much of the profanity of the ancient Dionysiac cult.

Kozani is situated near the A2 motorway, which connects the coast of the Ionian Sea with Thessaloniki and Turkish borders.

According to prevailing opinion in Greece, the name comes from the village of Epirus Kósdiani, the origin of settlers of Kozani in 1392.

In the east part of Kozani, an ancient necropolis has been found, dating to the early Iron Age.

[8] In the south-west of the modern city, on Siopoto hill, there was a settlement named Kalyvia, between 1100 and 1300, traces of which are still preserved.

Kozani was probably founded by Christian settlers who, after the Ottoman conquest, withdrew from the plains of Macedonia into the mountains, during the 14th and 15th centuries.

[10] In the Ottoman tahrir defter (number 167) of 1530, the settlement is recorded as a village with the name Kozani, and was within the kaza of Serfice.

During the 17th and 18th century, commercial relations with the countries of central Europe gave the opportunity for the city to flourish economically.

In the 1881–1893 census, the kaza of Kozana had a total population of 27,652; consisting of 15,017 Muslims, 12,633 Greek Orthodox, and two Armenians.

[19] In 1923, during the population exchange between Greece and Turkey, about 1,400 Greek families from Pontus and Asia Minor were settled in Kozani.

For this reason Kozani was included in the National Cultural Network of Cities with object the promotion of the Book and Reading.

The Ptolemaida Basin hosts the Western Macedonia Lignite Center, which is accountable for the production of forty per cent[citation needed] of the electric energy of the country.

Other famous products are marble, saffron (Krokos, Kozanis), fruits, local wines and specialized arts and crafts industry.

[22] There are some telecommunications companies, TV and radio stations, newspapers, magazines, and web portals based in Kozani.

It is developing into a nodal town of the Western Balkans, with areas and activities of a wider regional nature.

The Municipal Corporation of alternate planning and development of Kozani S.A.(DEPEPOK) was established in order to implement the projects of the ZEP.

Its territory corresponded with that of the current municipalities Kozani (except a few villages that were part of the Eordaia province) and Servia-Velventos.

[29]There are 18 Primary schools in Kozani, and another 8, in the municipal departments of Vatero, Kariditsa, Koila, Lefkovrysi, Lefkopigi, Nea Charavgi, Xirolimni and Petrana.

Carnival festivities in Kozani, and in general throughout Greece, last eleven days, starting on Τσικνοπέμπτη (Tsiknopempti lit.

[33] In 2010, Theodoros Lakkas, one of the most prominent figures of the fanoi, lead singer of the fanos Lakkos t' maggan and writer of funny short stories, published the first anthology of Kozani's carnival songs, entitled Ivgati Agoria m stou chouro [Go dance, my boys].

Official local public holidays are the celebration for the liberation of the city from the Turks on 11 October and Saint Nicholas day - Kozani's patron - on 6 December.