The history of Dudhani Lake is closely linked to the construction of the Madhuban Dam, a significant irrigation project on the Daman Ganga River. The dam was built to provide water for irrigation and drinking purposes to the surrounding areas, leading to the formation of the Dudhani reservoir. While the lake itself doesn't have a long, independent history, its creation has transformed the region, providing opportunities for tourism and recreation. The development of Dudhani as a tourist destination is relatively recent, with efforts made to enhance boating facilities and infrastructure to attract visitors. The lake's emergence as a popular spot has contributed to the local economy and provided a source of livelihood for many residents through tourism-related activities.