The people who live in Hoarafushi claim to have originated from Gudhanfushi, a vanished island adjacent to Huvahandhoo. The population moved to Huvuhandhoo as Gudhanfushi eroded away before moving onto Hoarafushi. The new settlers also called the island 'Huvarafushi'.
So far nine non-governmental organization have formed on Hoarafushi: Association for the Development and Solidarity of Hoarafushi (ADSH), Hoarafushi Sports Club, Hoarafushi Zuvaanunge Jamiyya, Past Student Association of Haa Alif Atoll School, Hoarafushi Advancement Society and Friends, Hoarafushi beleniveringe Gulhun, Hoarafushi Advancement society(HAS) and Native Society. now there is a very actice NGO that is Hoarafushi Youth Development society (HYDS)