According to legend, Khiva was discovered about 2500 years ago when Shem, son of Noah, found a well in the middle of the desert.
Khiva’s origin of name was based on the incident of Shem discovering water and he exclaimed “Khi-wa!”, which refers to “sweet water”. Most of the civilizations started off with the sweet precious water sources.
Following the next 1000 years, the area was inhabited by settlements and depended on nearby Amu-Darya River to grow crops. Khiva was founded around the 5th or 6th century according to the assumption of many archeologists. After Islam was spread among the society, the first structures were built near the Shem's well, and known as a small trading post on the Silk Road.
As Khiva grew to become one of the most significant and bustling settlements around, many began to visit the town. The first written sources are dated back to the 10th century. The Arab traveller, Al-Istachri, mentioned Khiva in his enumeration about the most important settlements in Khorezm.
Meanwhile Ibn Battuta, the Arab geographer, visited Khiva in the 14th century. He was impressed seeing the people and cultures of Khiva. It was a city full of people that it was almost impossible to find one's way out from the crowd.
In the 16th century, Khiva was made as the capital of an Islamic Khanate. This led to establishment of Khiva as the center of power in the region with various architectural projects developed around town.
The internal city of Khiva is formed by Ichan-Qala which means "internal fortress". The borders of Khiva proves the meaning of the structure in the 16th to 17th centuries. The clay wall was made up over 2,200m in length and 7 to 8m in height that surrounds the Ichan-Qala. The wall protects the fortress with semicircular towers.
The embattled gallery went along the top of the wall. Defensive walls of Ichan-Qala protected Khiva from invasion by Nadir-shah in the middle of the 18th century. Iranian troops invaded Khiva and the fortification system was partly destroyed. Khiva was expanded during the Qungrad dynasty. By the 20th century, the area was fifteen times as much as Ichan-Qala.
Taxes and money were introduced as a strong central power was created in Khiva in the 19th century. When the industry of Khiva grew, it became one of important markets of slaves in Central Asia and eventually slavery was formally abolished during the October Revolution of 1917. Khiva has become an important Islamic studies centre, consisting of 94 mosques and 63 madrassah(s). As of 1990, World Heritage Site by UNESCO recognised Khiva for its significant role in the world of Islam.