The toponym Margariti (Greek: Μαργαρίτι) is thought to come from Margaritos, a pirate of the Emirate of Sicily to whom the Crusader Normans surrendered their holdings on the Ionian coast in the 12th century.

[5] The Ottoman defter of 1530 that was based on the information of a register made under Selim I in 1519-1520 is the first source to mention the hamlet of “Margarit”, which had only 8 Christian households; the neighbouring villages were also devoid of Muslims.

The name refers to the Albanian Mazreku tribe which lived in the region and who, via their military services, founded the core of Margariti.

[17] After the Battle of Lepanto, crucial support was provided by armed units during the second siege of Margariti (November 10–14, 1571); revolutionary leader Petros Lantzas became a key figure by organizing the military movements and securing the cooperation of the population in the surrounding region.

[17][19][10] The fall of Margariti had a profound impact in the Christian states of the West as well as among the Greek population of Epirus that lived under Ottoman rule.

The Ottoman defter of 1583 shows that Margaliç had only slightly grown, as the number of households increased to only 10 with another 10 unmarried adult males in the settlement.

Each household paid around 100 Akçe as tax annually, which is the common average for villages situated on arable land that were not very productive.

Additionally, two primary schools (mektep), a hamam, two caravanserais, two tekkes and a number of shops were recorded; a madrasa was constructed in the town at some point during the 1670s following Evliya's visit.

By the end of the 18th century, Hasan Çapari, the leading figure of the family, owned the entire plain of Fanari (to the south of Margariti).

[23] Cham Albanian landlords of Margariti and Paramythia were in conflict with Ali Pasha of Yannina during much of the existence of the Pashalik of Yanina.

After Ali occupied the town in 1811 following a stubborn resistance led by Hasan Aga of Margariti, the settlement lost much of its prosperity.

[10] Margariti was represented as part of the delegation of Chameria by prominent local figure Jakup Veseli when Albania declared its independence in 1912.

[35] At the beginning of the Axis occupation during World War II, when the town was occupied by Fascist Italian troops in 1941, armed Cham Albanian groups under J. Sadik committed a number of massacres and lootings.

[38] The region of Margariti together with Mazaraki, was among the first to produce resistance units in Thesprotia in order to deal with the activity of Muslim Cham Albanian groups.

[39] At the end of World War II, the presence of Albanian Islam in Chameria was annihilated; Chams were expelled from the town by ELAS forces.

Those who could save themselves fled to Albania, whereas mosques, tekkes and other buildings reminiscent of the Islamic period were torn down, blown up or set on fire.

Many ruins, such as minarets, houses and mosques, can be found throughout Margariti and the surrounding villages as a reminder of the expulsion of the Cham Albanians from the region.