Mugi has a humid subtropical climate (Köppen Cfa) characterized by warm summers and cool winters with light snowfall.

[2] Per Japanese census data,[3] the population of Mugi has been declining rapidly since the 1960s, and is now roughly half of what it was a century ago.

In 1830, Australian convicts heading for Canton, China laid anchor off the coast of Mugi in a convict transport vessel, the brig Cyprus, which they had seized from their masters while being transported to Macquarie Harbour Penal Station in the former British penal colony of Van Diemen's Land, now Tasmania, an incident known as the Cyprus mutiny.

The village of Mugi was established within Kaifu District, Tokushima with the creation of the modern municipalities system on October 1, 1889.

Mugi has a mayor-council form of government with a directly elected mayor and a unicameral town council of eight members.

In terms of national politics, the town is part of Tokushima 1st district of the lower house of the Diet of Japan.