Khajjiar sits on a small plateau with a small stream-fed lake in the middle that has been covered over with weeds. The hill station is surrounded by meadows and forests. It is about 6,500 feet (2,000 m) above sea level in the foothills of the Dhauladhar ranges of the Western Himalayas and peaks can be seen in the distance. It is part of the Kalatop Khajjiar Sanctuary.
On 7 July 1992, Mr. Willy T. Blazer, Vice Counselor and Head of Chancery of Switzerland in India brought Khajjiar on the world tourism map by calling it "Mini Switzerland". He also put a sign board of a yellow Swiss hiking footpath showing Khajjiar's distance from the Swiss capital Berne-6194 km. Khajjiar is among the 160 locations in the world that bear topographical resemblance with Switzerland. The counselor also took from Khajjiar a stone which will form part of a stone collage around the Swiss Parliament to remind the visitors of Khajjiar as a Mini Switzerland of india" 
Khajjiar once formed part of the famous Rajput rulers of Chamba. It served as the capital of the Chamba rulers in the in the 6th century AD. In the medieval period, it came under the Mughal dominion and various Sikh kingdoms, which followed the former. Finally, it was brought under the control of the British. Today it is in the state of Himachal Pradesh.