The people of Tenganan occupy a special place in the population of Bali. They claim to have been created by the god Indra himself, and for proof of this refer to the "Usana Bali", a Balinese creation story written on palm-leaves in the 14th century, which states that the inhabitants of the village of Tenganan are descended from gods. The Bali Aga (Old Balinese) of Tenganan, like those of Trunyan (see Penelokan, Surroundings), form an independent community consisting of a number of groups organized in accordance with strict rules. They recognize no right of private property: everything belongs to the community. At the age of eight boys and girls must, after a transitional period of a year, join a group (truna or daha), and thereafter their family home is of only subordinate importance: the group is now responsible for bringing the children up to be full members of the community (krama desa). Later they are assigned, according to age, sex, occupation and capacity, to the "right" group, in which they remain for the rest of their lives.

As "favorites of the gods", the people of Tenganan see their aim in life not as strenuous physical labor but as the enjoyment of leisure, and also as the maintenance of old traditions and crafts. They let other people work for them: the rice-fields around the village are tended by peasants from other areas, who pay rent in the form of a proportion of the produce. The villagers of Tenganan thus have time to devote themselves to playing in gamelan orchestras, weaving fine textiles (this is the only place where the technique of double ikat is practiced: see Art and Culture, Textiles) or copying old manuscripts. Any villagers who dissociate themselves from the community (for example by marrying someone from another village) lose all their rights as natives of the village. They may be allowed to remain in Tenganan but will be required to move to a section of the village to the east, Banjar Pande, and will not be permitted to take part in any religious ceremonies.

Another version reveals that the people of Tenganan came from Peneges village, located in Gianyar, precisely near Bedahulu. Based on the folklore, once upon a time Bedahulu King lost one of his horses. The people looked for it to the east and the horse was finally found dead by Ki Patih Tunjung Biru, the King's right hand. For his loyalty, the King finally gave Ki Patih Tunjung Biru an authority to govern the land as far as the aroma of the carrion of the horse can be smelled. Ki Patih was an intelligent person, so he cut the carrion into pieces and spread it as far as he could. Thus he received a quite large area.

The word Pegeringsingan was taken from the word "geringsing". Geringsing is a traditional woven product that can only be found in Tenganan. Geringsing is noticed to be sacred for the belief that it has a magical power to drive away the evil or the black magic. Geringsing derived from the word "gering" means decease and "sing" means no.

As an ancient village, Tenganan Pegeringsingan is identical with religious activities. Many temple festivals performed in this village that attract visitors to come. The most famous one is "Mekare-kare" or "Perang Pandan". This is a ceremonial fight or war using thorny pandanous leaves as the weapon. This festival usually takes place in relation to the celebration of "Sasih Kelima" or the fifth Balinese month. Many other uniqueness of custom and culture can be found here that make Tenganan worth to visit.