Khanna is a Punjabi word, which means one quarter(1/4 or 0.25). The city was named thus because of its size, which used to be just a quarter of what a normal city should be. In other words, it used to be a very small city.Khanna the biggest Grain Market of Asia is on internet.
Khanna is an ancient town which came into existence 500 years back. History reveals that Sher Shah Suri built a number of Sarais(inns) at every 12 to 15 miles along Delhi Lahore road. one of the Sarais was built in this area which is still known as Purani Sarai.
After the decline of mughal rule in Punjab Banda Bahadur captured the area from Sirhind to Hoshiarpur. After that a jathedar of Dahedu controlled and occupied the whole of area from Dahedu to Nabha.
He married his daughter Daya Kaur to king of Nabha. When a family dispute arose between king of Nabha and Rani Daya Kaur she left Nabha for good and came back to Dahedu her parental home. According to Indian conventions she could not remain with her parents forever. Therefore, her father cut out a KANA which signifies a small portion of territory between Dahedu and Nabha.With passage of time word KANA came to be known as KHANNA.