I spent several weeks in and around Muktinath speaking with people about the ancient folklore describing the natural wonders of the site. A brief undersatnding of the ancient interpretations of Muktinath will further your appreciation for the temple complex.
Most of the tales I heard related to one of the four most salient wonders in Muktinath. Within the complex, there are countless ammonite fossils, natural flames that burn eternally from beneath the earth's surface, 108 water spouts, and a number of trees that grow in surprising abundance at the high altitude location. These four attributes are responsible for Muktinath's uniquness geologically and its sacredness religiously. While the area has been regarded as sacred for thousands of years, the first temple was built 900 years ago when a Hindu King orderd the construction of the Jwala Mai temple and designated the area to accomodate both Hindu and Buddhist pilgrims.
One explanation of the ammonite fossils and the trees detailed a story of several years of fighting, betrayal, and deceit among gods and mortals in the area. According to this legend, one demi-god cursed Vishnu by transforming him into saligram stone, a pipal tree, and a special type of grass. Hense, he is now manifested and worshipped in these forms.
Other explanations of the trees relate to holy magicians, ancient Tibetan monks, or ancient Sadhus on pilgrimage from India. According to these stories, the magicians, monks or sadhus happened upon Muktinath accidentally and marveled at its beauty. They stuck their walking sticks in the ground and poured out ladles of water upon the ground. Their walking sticks miraculously transformed into the trees that now grow in Muktinath and the holy water created the springs that now flow in Muktinath.
Finally, stories about the flames generally relate to a god or holy man passing through the area. Some stories claim that a god's mouth fell off at the site where the flames now burn. Others claim that the ancient Buddhist Guru Rinpoche lost a tooth at the site. More recent mythology has been created to explain the disappearance of one of the three supposedly eternal flames. Many believe that sinners to the area caused the flame cease burning. Others believe that godly power destroted the flame as a warning to people who no longer believe in or respect the Gods and therefore mistreat each other.
These story illustrate the ancient culture of mythology that has surrounded Muktinath for thousands of years. When you experience Muktinath, remember that you are walking where Gods have previously stepped.