According to local folklore, the area name of Panagia pre-existed the village name, and it came from some old monastery. There was no village in the area of NE Lemnos between the town of Kontopouli and the Plaka cape until the middle of the 19th century. Only a few scattered estate cottages belonging to the Turkish masters of Anypatis remained. Panagia was formed in 1865 by people of Agios Ypatios and Kontopouli who owned property in the area. Komninos Katogoudis, Ioannis Lagos, Emmanouil Paximadas, Dimitrios Tsagdis, and Ioannis Kechagias are said to be the initial settlers. The area “Panagia”  was chosen, where the old Byzantine monastery was built at the foot of the”Alepotrypes” hill, most likely because it was almost equal distance from the western and eastern coastlines, thus providing more protection.