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Nagarathars, presently known as Nattukkottai Nagarathars, are believed to have originated as Vaisyas from Santhyapuri and then migrated to Kanchipuram. The king of Kanchi Nadu, Prathaba Raja imposed heavy taxes and duties for them and so they migrated to Kaviripoompattinam (also known as Poompuhar), a coastal city and port as well as capital of Chola Kingdom. The vaisyas lived in mansions in the country side in a royal manner. (In tamil, country side means Nattu and mansion means Kottai). Hence they were called Nattukottaiyars. They were trading in Gems, Pearls, Silks and Spices with foreign countries, so thanavanigar status came from the mercantile activities in poompuhar. Being impressed by them, the Chola King bestowed on them the privilege of placing the crown on the head of the new ruler at the time of coronation. The king allowed the vaisyas to use separate flag for them.

Later, King Poovanthi Cholan's activities caused all the thanavanigar families inclusive of women and all female children to perish in suicide to save their dignity, leaving the male children who were studying outside the town in a gurukulam (Nattukkottaiyars community boarding school). After few years, King Poovanthicholan fell ill, realized his mistakes and knowing his recovery is impossible asked the thanavanigar boys to crown the coronation of his son Rajapooshana Cholan. Being bachelors and could not coronate as per the tradition, they married the saiva vellalar community girls according to the advise of gurus and scholars.


 Nagarathars used ships for trading between countries

The King Soundara Pandian of Madurai requested Rajapooshana Cholan to send some good citizens to his kingdom since his country witnessed the destruction of people, property and cattle. So the thanavanigars moved to Pandiya Nadu from Kaviripoompattinam and settled in Illayathakkudi. They were called Nagarathars since they came from town (Nagaram).

The Nagarathars formed nine groups belonging to 9 kovils and settled in 96 adjoining villages. Thus they were called Thonnutraru - oorar. These villages were classified into seven vattagais. Then nagarathars move closed to the centre of their settlement from the relatively far off villages and the number of villages shrank to present 76 villages.