The Britishers named the district as Chittagong when they came to own and possess it in 1760 from Mir Qasim Ali Khan, Nawab of Bengal. Before the advent of the British, the district was known as Islamabad, a name given to it by the Mughals after they had conquered the area in 1666 by inflicting a crushing defeat on the Arakanese. Before the Mughals there was no administrative unit like a district, and no fixity of the boundary. The area to the south of the Sangu or Matamuhuri river was under the Arakanese and the northern part of the district was often controlled by the King of Tripura or the Sultans of Bengal even when the city and the port passed into the hands of the Arakanese. Only the port and the town area had an identity which was widely known as “Chatigaon” or “Chatgaon”. Different sources and different scholars have put forth different versions as to the origin of the name of the district.
The Buddhist version is that it is a corruption of “Chait-Kyang” or “Chaitya-gram”, i.e. the land of the “Chaityas” or Buddhist monuments. According to the Burmese version one of the kings of Arakan invaded the country in the 9th century A. D. and erected a pillar in Chittagong which took its name from the remark of the "Tsit-ta-gung” inscribed on the pillar which means “to make war is improper” . Sir William Jones in 1787 gives a poetic version saying that “The province of Chatigaon (Vulgurly — Chittagong) is so called, I believe, from the ‘Chatag’ which is the most beautiful little bird I ever saw”. Mr. L.S.S. O’Malley, I.C.S., the author of the District Gazetteer (1908) accepted the Hindu version in the following words: “The name is more probably a form of the Sanskrit "Chaturgrama" or the four villages and it may be added that such a derivation is consonant with the present spelling of the name in vernacular, which is “Chattargram”. But with all deference to the learned author we may point out that the vernacular name of the district is not “Chattargrama”, it is Chattagram. “Chattar” and “Chatta” are not the same and do not mean the same.
The author of the district gezetter (1970) considered opinion is that the Buddhist in their heyday might have called the town and the adjoining area Chaitya-Kyaung and the Arakanese might have given it the name of “Tsit-ta-gung” when they came to occupy it. Similarly, the Arabs who had a strong and influential business community carrying on trade and commerce with the east and the west often referred to it as Madinatul Akhzar “The ever-green city”. In the eighteenth century Hakim Muhammad Husain Ulwi in his Persian book Makhzan ul Adwia called it “Green City” (Shahr Sabz). The Portuguese who became supreme for a time called it “Porto Grande”, the Big Port. But in spite of all these names, the Muslims, since their association with the region even before it was conquered by the King Fakhruddin Mubarak Shah of Sonargaon in 1340, called it “Chatigaon” or “Chatgaon” with reference to the most widely accepted and popular belief connected with the spiritual conquest of the land by Hazrat Badar Aulia. The symbolic story that is current even today is that Hazrat Badar Aulia when he came to the region found it covered with dense forest and infested with evil spirits who would not allow him any space to sit for prayer. After prolonged negotiations, the evil spirits at last agreed to allow him a little space just sufficient to put a Chati or earthen lamp on. Pir Badar having placed an earthen lamp, lit it and started calling aloud ‘Azan’, whereon the evil spirits fled as far away as the light of the lamp and the sound of the ‘Azan’ reached all around. Thus gaining a foothold, Hazrat Badar Aulia proceeded to preach Islam and shed its light till the entire area was completely freed of the evil spirits. The area thus reclaimed was given the name of "Chatigaon" or the land of the Chati or earthen lamp. This name became so widely used and so deep-rooted that 94 years of Mughal rule with such a grand name as Islamabad which they gave to the land, could not wipe it out. Even 187 years of British rule had no effect on it. Chittagong, a name given by the Britishers is used only in official papers and by English speaking people. To the millions of the Bangladeshis “Chatigaon” or “Chatgaon” is a more widely and frequently used name in literature as well as in common parlance.