The boundaries of Dharan Sub-Metropolitan City are as follows: to the east, it borders Kerabari Rural Municipality; to the west, it adjoins Barahachhetra Municipality; to the north, it is next to Sanguri Gadhi Rural Municipality; and to the south, it connects with Ramdhuni Municipality and Itahari Sub-Metropolitan City. These boundary areas link Dharan with other local administrative regions and establish it as a significant city in the Koshi Province.

The administrative division of Dharan Sub-Metropolitan City falls under Koshi Province. It is located in the Sunsari District, with its district headquarters in Inaruwa. This sub-metropolitan city is part of Federal Parliament Election Area No. 1 and is divided into Provincial Election Areas No. Ka and Kha. Dharan is further divided into a total of 20 wards, which categorize its various regions.