The village name comes from the name of the nearby creek, which is surrounded by Palamaka plants, and "toi" means savannah in the Patamona language.

[3] The colonial period saw the influence of the Dutch and later the British in the area, but much of the region's interior, including places like Paramakatoi, remained relatively isolated from European settlement.

Paramakatoi's development as a more established settlement is closely tied to the expansion of government and infrastructure in the 20th century.

In modern times, Paramakatoi remains a small but significant administrative and cultural center for the local Indigenous communities.

It serves as a hub for surrounding villages and is part of the government's efforts to provide services to remote areas.