The rise of Kalimpong to prominence came after the end of the Anglo-Bhutan War; until 1865 the area in which it stands had been administered, for 150 years or more, by the Bhutanese official in charge of the small fort at Dumsong, about 10 miles to the north-east of Kalimpong, while his superior lived at a larger fort about 25 miles to the east; Dalimkot, large enough to hold a garrison of 300 men. Rennie has described how these forts were seized and occupied by troops of the British and Indian armies during the war, after stiff resistance at Dalimkot, with considerable loss of life, and were dismantled or abandoned after peace prevailed.

According to Arthur Foning, in his book "Lepcha, My Vanishing Tribe"; a fascinating account of tribal and family life in the Kalimpong area during the last two or three hundred years; Kalimpong owes its name indirectly to the Bhutan administration; the Bhutan revenue officials used to come from Damsong Fort once a year to Rinkingpong (the side of Kalimpong Cantonment since 1962), an hour's walk south of Kalimpong to collect grain and other produce from the Lepcha villagers of the area; and, when not occupied with their taxes, these local tribesmen used to organise field sports for themselves on such level ground as they would find up there; so the name Kalimpong means, in Lepcha, "Ridge Where We Play". Others, however, give the Lepcha words a different meaning; for K.P. Tamsang, author of "The Unknown and Untold Reality About the Lepchas", Kalimpong simply means "Hillock Assemblage". The eccentric General Mainwaring, who, in his grammer of the Lepcha Language (1875), claimed that Lepchas was the oldest language in existence, "unquestionably far anterior to the Hebrew or Sanskrit", believed the name to be Tibetan, meaning 'commandment stockade'. Tibetan gives it the meaning 'stockade of the King's Minister'. Another version says that the name originated from 'Kaleon' which was an official of the Bhutan Raja and "Pong" meant area or stronghold. The only certain thing the name 'Kalimpong', then, is that its meaning is uncertain.

After the Sinchula Treaty with Bhutan in 1865, the Kalimpong area was made into a sub-division called Dalimkot within the Western Dooars District; but, in the following year it was absorbed into the Sardar Sub-Division of Darjeeling District. It was not until 1916 that the area became a separate sub-division again, with Kalimpong as its headquarters. This upgrading came about because part of the hillside just to the south of Kalimpong was to be laid out as the Development Area in order to convert Kalimpong into a hill station alternate to Darjeeling.

Although the population of Kalimpong was small then in 1864, it was already a place of some religious significance; this was due to a nearby Buddhist Monastery. The Lamas were absent, wrote the Hon. Ashley Eden in his report, "but we were shown over it by two nuns, who pointed with pride to an English vessel which was placed on the altar as a recetacle for holy water, but which in other countries is used for a very different purpose". Surgeon Rinnie, whose journey to the recently captured fort of Dalimkot took him through Kalimpong a year or so later, gives the name of this monastery as Tusso Cimpa (Thongsa Monastery); he found only three monks in residence. It is possible that this monastery was founded as early as the later part of the 17th Century, at much the same time, as according to one authority, B.J. Hasrat, the 4th Deb Rajah of Bhutan, Tenzing Rabgay (1680-94), constructed Damsong Fort, drove the local Lacha resistance leader, Gayboo Achok out of the Samsong area, and placed all of what is now Kalimpong Sub-Division under the authority of the Jongpen, or Governor, of Dalimkot.

Kalimpong's trade links with Tibet go back at least a hundred years, to befor ethe Young-Husband Expedition in Khasa, but did not long survive the Chinese invasion and occupation of Tibet in 1950.The name of the eastern outskirts of Kalimpong, Top Khana, on the road leading to Sikkim and Tibet, is a reminder that Kalimpong too, has been concerned in hostilities with Tibet; it was here that the artilley was kept in 1888, on its way up to the Sikkim-Tibet border and the engagement at Tuku la (12,300 ft) near the Jelep La. The Treaty following the Young-Husband Expedition (1904) was the signal for a remarkable increase in trade with Tibet. At first Kalimpong was merely a receiving and despatching centre; but soon a number of large godowns were built in the Top Khana part of the town where 3,000 or more local people were employed for the purpose of drying wool, and sorting and bailing it for export even to America. After the Chinese occupation of Tibet the godowns had to be put to other uses.

Since 1959, the year Dalai Lama took refuge in India, a different Kalimpong has developed, a Kalimpong of orchid and nurseries, with a strong military presence on Rinkingpong, the ridge where once the Lepcha tax payers held their sports-days.