Mugma is a ` census town` located in Dhanbad district of Jharkhand. The district headquarters town of Dhanbad is in the northwest at a distance of 35 kilometers. Mugma is located in the northwest of Nirsa at a distance of 10 kilometers. Situated on the banks of the Barakar River, Mugma is well known for its coalmines. The nearest connecting points are the Ranchi Airport and the Mugma Railway Station on the Dhanbad - Barachak rail route. Geographically, the town is located between 23.77° North latitude and 86.73° East longitude at an average elevation of 132 metres (433 feet) above mean sea level.

The Census report provides detail information about the demography of the town. According to the Indian Census report published in 2001, Mugma had a small population of 2978. Males constitute 56 percent of the population and females comprises of the remaining 44 percent. In Mugma, 13 percent of the population is less than six years of age. The Census report also throws light on the literacy rate of the town, which is 54 percent. It is lower than the national average literacy rate, which is 59.5 percent. The male literacy rate is 66 percent and the female literacy rate is 39 percent.