The present-day Koothali Grama Panchayat area was part of the ancestral property under the control of Koothali Mooppil Nair, who held the title Vallabhan Chathan, and Godheraman, the Avinjattu Naduvazhi, in the old Kurumbranad Taluk.

This extensive region, which once stretched up to Wayanad, was historically known as the Koothali Estate.

Paddy cultivation was carried out during the Kanni and Makaram months in paddy fields covering nearly 40 percent of the total geographical area. Kanni cultivation (Modan) was also practiced in the garden lands.

Based on the type of cultivation, the land was classified as Nancha, Puncha and garden land. Land tax was assessed based on the crops cultivated.

Vallabhan Chathan, the last Naduvazhi of the ruling family that followed the Marumakkathayam system, passed away without heirs. Consequently, the properties without legal heirs were vested with the British Government in 1932.

The headquarters of the Naduvazhis in Koothali was known as "Madham".

The social reform activities carried out here as part of the anti-untouchability movement awakened the self-awareness and collective strength of the oppressed sections of society.

Modern education paved the way for new social interactions based on self-respect and humanity.

There are different interpretations regarding the origin of the place name "Koothali". One explanation suggests that it evolved from "Koothattupalli", while another interpretation attributes its origin to the words "Koothu" and "Aali".

In the early period, traditional learning centres known as Ezhuthupallis, conducted by local teachers, served as the primary educational institutions. The first elementary school in Koothali was established in the 1930s.

Koothali has a rich artistic and cultural heritage. Classical art forms such as Kathakali, Koothu and dance, as well as folk art forms such as Theyyam, Thira, Thottam, Njattippattu and Kolkkalippattu, had an important place in the cultural life of the region.

In the theatre associated with Koothali Madham, art forms such as Koothu, Kathakali and dance were practiced and performed.

Along with its rich cultural heritage, Koothali has also made notable contributions to the field of sports.

Rural sports festivals and various sporting activities have contributed to strengthening the sporting culture of the region.

Dr. K. G. Adiyodi, who served as the Finance Minister of Kerala and Chairman of the Kerala Public Service Commission, is one of the prominent personalities who brought recognition to Koothali.

Olympic athlete P. T. Usha is another prominent personality associated with Koothali.