Lijiang is a city located at 2400m above sea level in the Northern part of the Yunnan province. It is known for its emblematic old town, its narrow streets, wooden buildings and canals. While the most central area have been massively renovated, some parts of Lijiang are well preserved as soon as you beat the crowd and explore a little further than the main street. If you are heading from Dali, it is a short 2-hour bus journey.
While the main interest is to get around the old town and wander its streets, there are a couple things to see such as the market square, the White Horse Dragon Pool, the Black Dragon Pool Park, the Museum of Naxi Dongba culture and the Mu Family Mansion
If you are looking for a less crowded option, Baisha is a small village nearby Lijiang which is easily accessible by bicycle or bus on a day trip.