For over 450 years, the coastal enclaves of Daman and Diu on the Arabian Sea coast were part of Portuguese India, along with Goa and Dadra and Nagar Haveli. Goa, Daman and Diu were incorporated into the Republic of India on December 19, 1961, by military conquest. Portugal did not recognise the Indian annexation of these territories until 1974.
After Liberation on 19th December, 1961 from Portuguese Rule of more than four centuries, Daman and Diu became a part of the U.T. of Goa, Daman and Diu under Government of India. After delinking of Goa, which attained statehood, U.T. of Daman and Diu came into existence on 30th May, 1987.
The territory of “Goa, Daman and Diu” was administered as a single union territory until 1987, when Goa was granted statehood, leaving Daman and Diu as a separate union territory. Each enclave constitutes one of the union territory’s two districts. Daman and Diu are approximately 650 kilometres away from each other by road.
(Ref: 1.https://en.wikipedia.org/wiki/Daman_and_Diu 2.http://www.daman.nic.in/about-daman.aspx 3.www.indian-gk.in)