The invention provides a traditional Chinese medicine composition for treating burns and scalds and a preparation method of the composition, and belongs to the technical field of traditional Chinese medicines. Borneol, honey, sesame oil, calcined calamine, giant knotweed rhizome and rhizoma bletillae are taken as sovereign medicines to disperse swelling and relieving pain, resolve putridity and promote tissue regeneration, reduce exudate, and have the capability of supplying blood and oxygen to form a surface protective film to revive semi-aged cell tissue. Radix sanguisorbae, phellodendron bark, dried rehmannia root, coptis root, rhubarb and scutellaria root are all minister medicines, and have the effects of detoxifying, diminishing inflammation, stopping bleeding, promoting healing of damaged parts and resisting bacteria. Radix arnebiae and spica prunellae are taken as assistant medicines. Rhizoma atractylodis, radix astragali, rhizoma ligustici chuanxiong, radix angelicae sinensis,rhizoma cyperi, carthami flos, and radix glycyrrhizae are used as courier medicines, are based on the compatibility principle of taking advantage and avoiding disadvantages of sovereign, minister, assistant and courier medicines and aim to achieve the effects of dispersing swelling and relieving pain, resolving putridity and promoting tissue regeneration, also promoting blood circulation and resolving blood stasis, improving circulation, reducing serous fluid exudation, clearing away heat and toxic substances, resisting and inhibiting bacteria, and the combination method is strict and the mechanism of diseases is hit. The cure rate of 263 patients without dysfunction reaches 100%. Some burn patients with deep second degree or above have moderate fever but few high fever, and none of the patients are complicated by bacterial and fungal infection.