The name Daga Dzong is derived from two sources; Darkala, which comes from the province’s guardian deity Jomo Darkala and Darkanang (The Realm of White Prayer Flags) from Dudjom Jigdrol Yeshey Dorji, a great Buddhist master. The Daga Dzong was traditionally the stronghold of the Daga Penlop, who held the rank of cabinet minister under the Desi (temporal ruler) system of government introduced by Zhabdrung Ngawang Namgyel in 1651.
Druk Namgyel who was under the order of Zhabdrung Ngawang Namgyel to pacify the area and defend it from the southern states, present day Assam and West Bengal of India built the Dzong. Due to its defensive nature, the Dzong occupies a ridge overlooking the valley. The dzong was completed within two years of first stone being laid.