According to records from 1638, Penni Handi came from Rõuge to the village of Kiesse Jerwe (Kisõjärve) had a plot of land of something in the vicinity of five hectares, two horses, three cows and “many sons”. That may have been the origin of the name Põnni.
The story is that when the Vastseliina manor lord bought new land in the area, a local, Peeter Udras, steered the gentleman to pastureland along the Pedetsi River that was so swampy that he only escaped with Peeter’s help. And thus the first intention was scrapped and the cattle farming manor was established in Illi and the actual manor house in Misso village. The manor lord promised to dredge the Pedetsi River so that more hay could be grown for the cows of Põnni village, and this he duly did.
Põnni village has ten farms: Jaani, Kõivu, Miko, Männi, Tiigi, Nakrisoo, Ploomi, Põnni, Siksali and Tantsoro farm.