Around 1930, groups of Guji Oromo migrated into the area, and by the time a German ethnological expedition arrived, they had begun the process of becoming settled farmers. Shortly after the capture of Shashemene in May 1941, a mobile force, consisting of one company of the Natal Mounted Rifles and the 6th KAR, with light tanks and armoured cars, moved forward towards Dilla. Almost to its own surprise, this scouting operation cut off the retreat of the 21st and 24th Italian Divisions, pinning them against the east side of Lake Abaya. By 1958 Dilla was one of 27 places in Ethiopia ranked as First Class Township. The Imperial Railway Company of Ethiopia carried out surveys for extending the railway with a 310 km line from Adama to Dilla between 1960 and 1963. The government formed a Nazareth-Dilla Railway Development Corporation to support this new branch. Although the French government offered a loan to fund this new branch in 1965, and Yugoslav experts had studied and thought the project would be worthwhile, this project was never carried out. Outside Dilla is Michille hill, where a peasant uprising by the Gedeo people was crushed in 1960. Gedeo elders, invited by Afanegus Eshate Gada to meet him and discuss their grievances with the feudal system they lived under, were ambushed and slaughtered by the army. On 22 July 1998 there were violent clashes near Dila. The press published conflicting statements about who the parties were and how many had been killed. Ethiopian government spokeswoman Selome Taddesse said that about 140 people were killed and large numbers at least temporarily displaced. On October 12, 2008, Bekele Girma, an All Ethiopian Unity Party activist, left AEUP's head office in Addis Ababa to open an office in Dila. Despite having a letter from the National Election Board of Ethiopia requesting regional government officials to assist him in opening a local office, Dilla police chief Obsa Hundessa detained Bekele and refused to allow him to open an office in that town. Bekele was released in November.
Demographics
Based on the 2007 Census conducted by the CSA, this town has a total population of 59,150, of whom 31,068 are men and 28,082 women. The majority of the inhabitants were practiced Ethiopian Orthodox Christianity, with 41.65% of the population reporting that belief, 39.2% were Protestants, 15.93% were Muslim, and 2.68% were Catholic. The 1994 national census reported this town had a total population of 33,734 of whom 17,346 were men and 16,388 were women.