The municipality is located roughly 25 kilometres (16 mi) to the south-west of Lumbini, a UNESCO World Heritage Site and the birthplace of Gautama Buddha.

On 7 November 2014, the remaining region of Gotihawa and Tilaurakot VDC were included, making a total of 19 wards within this municipality.

[3] On March 10, 2017, the Government of Nepal restructured the local-level bodies into 753 new local level structures.

On the other hand, nearby Piprahwa in India has also been proposed as the location for the historical site of Kapilavastu.

King Śuddhodana and Queen Māyā are believed to have lived at Kapilavastu, as did their son Prince Siddartha Gautama until he left the palace at the age of 29.