The name Škofja Loka derives from the medieval times and it was originally named Loka, which means wet, grassy area near water. However, at that time there were many Lokas in Slovenia, and there had already existed a rural settlement named Loka (today’s Stara Loka) not very far from the town, therefore later on Škofja was added to the name Loka. This adjective is linked with the donation of the Loka region to the Bishops of Freising, and the town of Loka was thus renamed to Škofja Loka. There is a Negro with a crown in all symbols of Loka, which relates to the legend about the land lord Abraham and his servant. The legend says that they were travelling along the Poljanska dolina valley and they met a big bear in dark woods. Bishop Abraham stopped, but the Negro drew a bow and shot the bear. Abraham had the head of the Negro pictured in the town coat-of-arms in order to thank the servant for having saved his life.
After the Second World War, an intensive population growth began in the Škofja Loka region, which was the consequence of quick urbanisation, industrialization and deagrarization. It was enabled by wide employment in industry and a large number of house buildings. Demographic growth was strengthened especially after 1961 as the consequence of strong immigration from the ex-Yugoslav republics. After 1991, when Slovenia gained independence, growth was a bit slowed down. It is typical for the Škofja Loka region that there are regions with larger number of inhabitants and dense human settlements in the plane area, and settlements with small number of inhabitants and rare settlements in the hill area.
According to the last population census in 2002, there were 40,649 inhabitants in the Škofja Loka region, and according to the last information of the Statistical Office of the RS the number of inhabitants in the Škofja Loka region increased to 41,080. It is typical that the number of young population has decreased, which is also confirmed by general decrease of the number of births; however, the number of old population is higher, as the population lifespan is getting longer. According to the last information of the Statistical Office of the RS, the fertility rate in the Škofja Loka region is the highest in Slovenia, and thus we can expect population growth trend in the future.
The number of working population has slightly increased in the last years and it amounts to approximately 15,000 working population. Considering the average unemployment rate in Slovenia, which in February 2011 amounted to 10.4 %, the unemployment rate in the Škofja Loka region is relatively low and it is steadily falling. The entire region has a 4.7% unemployment rate, which is not so big in comparison with other regions in Gorenjska, as large industrial plants were closed in other places in Gorenjska and they provided workplaces to the majority of their population.