Manikaran is a well-known pilgrimage centre for the Hindus. There are several temples in Manikaran, the most important one being the Lord Raghunatha (Rama) temple that was constructed by Raja Jagat Singh in the 17th century. Though there is no historical evidence, the pandas (priests) of the temple claim that the idol of Rama was brought from Ayodhya and installed here. There is another very old temple at Manikaran. This temple is dedicated to Lord Siva. It suffered extensive damage during the 1905 earthquake and got tilted.
Manikaran is also held sacred by the Sikhs because of its association with Guru Nanak. There is a famous gurudwara - Sri Guru Nanak Dev Ji Gurudwara here. Devotees visiting the Gurudwara take a holy dip in the hot water emanating from the springs.
(Source: www.indialine.com )
Legend associated with Manikaran
The mountains, the lush green patches and the forests of Manikaran is belived tp have charmed Lord Siva and Goddess Parvati and they decided to stay there for sometime. For long eleven hundred years they stayed at this place. At one time, when the Lord and the Goddess were relaxing in the waters of a stream running by the side, a 'mani' (precious stone) from the ear-ring of the Goddess dropped somewhere. Parvati was much distressed and there was a thorough search but efforts to find out the mani failed. Lord Siva got enraged and opened His third eye of the Lord Siva. As a result, there was a great commotion all over the universe. In order to subside the anger of Lord Shiva, Sheshanag hissed and there was a flow of boiling water continuously, which passed over the area and out came a large number of the precious stones.
(Legend source: http://www.pilgrimage-india.com/sikh-pilgrimage/manikaran.html)