The town is located in the local government area of Tatiara District Council about 278 kilometres (173 mi) south east of the state capital of Adelaide.

The name of the town is derived from the Aboriginal word mantala meaning "place of thunder", referring to a rumbling sound made when trampling on the earth.

[9] The Council enquired about the spelling in 1965 and the Postmaster General proposed to change it to Mundalla in 1972, but this was not approved by the Geographical Names Board.

[11] Mundulla has a number of heritage-listed sites, including: Mundulla Yellows is a disease fatal to (especially) eucalypts, characterised by all leaves on a limb turning yellow then dying.

Of unknown cause/s, it has several peculiar attributes: slow irreversible progression towards death and presence of unaffected trees among the dead and dying.