It is thought that Pinarayi derived its name from the word 'Pinam' (meaning dead body in Malayalam), as feuds between Kottayam and Kolathunadu rulers were common here at that time. This quaint village also had played a big part in the freedom movement in Kerala. The mass movement against landlordism, opposing the practice of 'varam and pattam' (rent given by peasants to landlords), was piloted from here. The Kerala chapter of Indian Communist party took birth in 1939 at Pinarayi.

The place is noted for its secular mindset. When communal riots tore different parts of Thalassery in the first half of the 20th century, this village remained unaffected, testifying the progressive mentality of the public. Main occupation of the people is beedi manufacturing.