Sthala Puranam
Lord Sri Rama on his return from Srilanka after killing Ravana wants to perform pooja to Lord Siva at Rameswaram to wash off his sin of killing Ravana. Kula guru of Rama, Maharshi Vasishta fixes a muhurtham for installing the sivalingam. Rama instructs Hanuman to bring a sivalingam from Kasi for this purpose.
Obeying Rama's order, Hanuma reaches Kasi and selects a big beautiful white sivalingam. He keeps the lingam in a chikkam (nest of threads) and starts traveling back to Rameswaram. In his return journey, he stops by at this village to perform his early morning worship to Sun (the so called sandhyavandanam or suryopasana). He keeps the chikkam in this place and finishes his worship, meditation and arghya tarpana to Sun. When he comes back from pooja and tries to lift the lingam, he realizes that the lingam has been installed in that place, that too at the same muhurtham where Vasishta wanted Rama to install the lingam at Rameswaram. After trying hard to lift the lingam, Hanuman realizes that it is impossible for him to separate it out from earth, so he gets a different lingam from Kasi. Meanwhile, since the muhurtham to install the lingam is approaching, Rama asks Sita to carve out a saikata lingam (lingam made up of sand), installs the same and finishes his worship. As the worship is done by the time Hanuman reaches with a new sivalingam, he himself installs it in Rameswaram.
As the Lord Siva has been installed here along with the chikkam, this village is called Sivadevuni chikkala.
Read more about this topic: Sivadevuni Chikkala