Most sources say a fishing village was founded on the site by the 12th century and before the modern name of Candi Dasa was adopted it was known as both Teluk Kehen ("Bay of Fire") and Cilidasa. There is a temple near the lagoon, with a statue of the fertility goddess Hariti surrounded by a group of children, and cilidasa translates from Balinese as "ten children", so many Balinese who want to have children go on pilgrimage to this place. The modern name is thought to be a corruption of this older name. The town began to catch on as a tourist destination in the 1970s, since there is good snorkelling and diving in the area and the town provides easy access to other destinations in eastern Bali.