New Historicism is the term coined by Stephen Greenblatt, which focuses on the parallel reading of the literary and non-literary text of a literary artefact. This could be identified in any literary forms that discusses about the incident minimum of fifty years old. Here, in The Palace of Illusions Chitra Banarjee Divakurini has presented the great epic Mahabharata in feministic perspective. The Ithihas - Mahabharata is one of the great epics of India, which is considered to be the encyclopedia of Indian philosophy, has multiple facets and so as, in The Palace of Illusions, Divakurini has focused the female protagonist Draupadi right from her birth creating a new history. This paper is an attempt to interpret the literary and non- literary texts which could be factual or fictional. The entire novel belongs to the pre-historic period; the theory always states that interpretation need not be the same to the other. Divakurini has fictionalised the untouched portions of the Draupadi, who is the heroine or female protagonist of the Epic. This paper explores the concept textuality and historicity of New Historicism and also the tries to exhibit the fact that the interpretations may not be the same and when it differs it generates another form of artefact.ew Historicism is the term coined by Stephen Greenblatt, which focuses on the parallel reading of the literary and non-literary text of a literary artefact. This could be identified in any literary forms that discusses about the incident minimum of fifty years old. Here, in The Palace of Illusions Chitra Banarjee Divakurini has presented the great epic Mahabharata in feministic perspective. The Ithihas - Mahabharata is one of the great epics of India, which is considered to be the encyclopedia of Indian philosophy, has multiple facets and so as, in The Palace of Illusions, Divakurini has focused the female protagonist Draupadi right from her birth creating a new history. This paper is an attempt to interpret the literary and non- literary texts which could be factual or fictional. The entire novel belongs to the pre-historic period; the theory always states that interpretation need not be the same to the other. Divakurini has fictionalised the untouched portions of the Draupadi, who is the heroine or female protagonist of the Epic. This paper explores the concept textuality and historicity of New Historicism and also the tries to exhibit the fact that the interpretations may not be the same and when it differs it generates another form of artefact.Keywords: Textuality, Historicity, Interpretation, Factual and Fictional.