Whenever most people say that they are going to Dharamshala, they actually mean McLeodgunj. That's where the Dalai Lama and most Tibetan population is based at. Dharamshala - also spelt as 'Dharamsala', is the town almost at the foothills of the McLeodguj mountain. 'Gunj' means market or neighbourhood in Hindi, so you would find several areas with the names ending with 'gunj' Pahadgunj, Purabgunj eg in the North India. So this is the market or area named after Mr. McLeod.
In the 60s Indian government give this land to the The Dalai Lama and the tibetan refugees and since then it has become the pilgrimage and tourist centre for the world. The Dalai Lama isn't there all the time as He is travelling, but you can easily find his schedule on his website. If you are lucky you can get his personal audience too! But surely you can attend his sermons there.
The easiest way to reach McLeodgunj I have found is to take a Volvo bus from new Kashmiri Gate bus station in Delhi and travel overnight. By 7am you are in McLeodgunj. The Main Square / Chowk or intersection is just walking distance from the bus stand and the rest of the town is in the vicinity from there.
McLeodgunj, like most of the Himalayan towns, is a small town with population of about 10,000, But of course long term residents and hundreds of tourists aren't counted in this. In the high tourist season the town is buzzing with people. I personally like to avoid crowds and prefer to go anywhere little off season, so the charm of the high season is still there but there is much lesser crowd.
There are 2 main roads in the town. Both run parallel for about 100 metres and then bifurcate. One on the left goes down to the lower, actual Dharamshala town [Jogibara Rd.] and other on the right, leads to the Dalai Lama temple, his residence and Tibetan government offices in exile [Temple Rd] -Tsuglagkhang. Tsuglagkhang is quite a big complex and you can see a very small portion where the temple is located. Rest is the residence and offices of the Tibetan government guarded by a big gate and some very friendly guards. It has very beautiful British Era buildings with long verandas and such. When we visited Him, it was there.
Although these two are the main roads, they are quite narrow and only one car can pass at a time. Both roads are lined up with very interesting shops; All full of exotic looking necklesses, garments, rings, diaries, t-shirts, stickers and so on. Tourists are seen flocking to buy some of these. A couple of bookshops, a doctor's clinic, a couple of medical shops, a tailor shop, some bigger souvenir shops and several restaurants too are on these roads. The shops can prove to be very expensive. Some extensive amount of bargaining too happen all the time. Some people don’t bargain too much with Tibetan sellers, perhaps because somewhere in the mind it might be going on that they are refugees, but some do.
One end of these roads is the biggest Chowk in the town - The Main Square / Chowk. It is on the side of the bus stand and to the opposite side of Tsuglagkhang Complex. This chowk is just a bigger area with several modern shops around and a now neglected, little shop 'Nawrosjee and Sons', which is 150+ years old ! This shop was set up for providing utilities groceries etc to the British. 7 roads meet in this chowk. All these roads are full of eateries and hotels of various magnitudes. More expensive and bigger hotels are to be found near the other end of these main roads, probably because that area is nearer to the Tsuglagkhang Complex.
Main Square - You enter Mcleodgunj through this chowk. Unless you take a ride from lower Dharamsala; then you would appear on the other side of the main roads. This part of the town is quite eventful. Lots of interesting events which include Free Tibet protests, some rallies and uncountable number of traffic jams keep happening all the time. Especially in the high tourist season it is difficult even to walk without brushing yourself against people, cars or stray cows. Just little inside of a tiny looking road there are some shacks selling absolutely fabulous tea and snacks; and little further is the office of Taxi Union. But I have found it is the best to book any taxi through the hotel you are staying as they usually call the known good drivers.
In the buildings around this square are some bigger cafes and eateries, an ATM and an Osho Book stall. Usually the chowk is full of people and if you have nothing else to do then you can very easily sit in one of the cafés and entertain yourself by looking at the crowd and their activities. Trust me, it can be highly entertaining!
One road goes to Bhagsu Nag Temple and there are some shops, hotels etc for about a kilometre. Kunga Guest House is on this road. One steep road goes to TIPA and others are the 2 main roads.
On the other side of the main roads the market extends to quite an extent. More relaxed cafes and such are found on this side of the town. This part of the town is more eventful indoors. Some kind of music jam ups, some lectures, some cookery classes and so on… all happens this side of the town.
But for the first day of the visit the most interesting thing is the market and some really fabulous eateries which serve Tibetan, Italian, Indian and other exotic cuisines.
By the time one sees all this the day ends and you realise your legs are demanding for calling it a day !