Per historical Hindu practice of Sati, the queen sacrificed herself by sitting atop her deceased husband's funeral pyre. Prior to her death, she told Thapa that she would appear again, six months later, a farmer working on the field split a stone which apparently started a stream of blood and milk. After hearing about this, Thapa went to where the stone was located and started to do Hindu tantric rituals which halted the stream.

Later he built a shrine at the same spot so that their wishes can come true, and also the persist of the temple necessity should be the ancestor of Thapa. Manakamana is thought to be Champawati, wife of Ram Shah, she reappeared during his son Dambar Shah's reign, and according to other sources indicate that she appeared during the reign of Prithvi Narayan Shah, founder of present-day Nepal. The temple is the holy site of Goddess Bhagwati, an incarnation of Parvati. Mana translates as "heart" and "kamana" as "wish" and it is believed that the Bhagwati grants wishes of its devotees.