The name 'Dhanyal/Dhanial' is derived from Mohazzam Shah which was the name of chief and famous Sufi saint of Lower Himalayas who shifted from Dhanni (old name of Chakwal) in late 12th century. Forefathers of Mohazzam Shah who were Arab Muslims - migrated from Iraq into Multan during the era of Muhammad Bin Qasim. Desandants of Mohazzam Shah ruled Multan state for about 190 years. Mohazzam Shah supported Muhammad Ghori to curb the activities of Hindu Rajputs who aggressively attack Muslim army of Muhammad Ghor.

Due to influence of Mohazzam Shah alias Hazrat Baba Dhanni Pir, many non-Muslims of this area converted to Islam. The forefather of Dhanyal tribe was inspired by Syed Ali Hamdan alis Shah-i-Hamdan of Srinagar, Kashmir. Mohazzam Shah sacrifices his life with the battle of Hindu Dogra Rajputs in Kashmir in 13th century. Mohazzam Shah was the spiritual leader of Dhanyal, Satti and Abbasi tribes in the area of Murree Hills, plain area of Potohar and Kashmir.Hazrat Baba Dhanni Pir's shrine is situated in Mouri Sayyaedan, a valley on Lehtrar Road, Islamabad, Pakistan. An Urs (annual death anniversary) is held every year in April at his shrine.