A 28-year-old woman from Gujarat presents with multiple erythematous papules and nodules on her face, ears, and forearms that have been enlarging over the past 8 months. She denies systemic symptoms. On examination, the lesions are firm, non-tender, and some show central ulceration with a granular base. Leishmanin test is strongly positive. Histopathology shows well-formed epithelioid granulomas with few amastigotes. What is the most likely diagnosis and what does the positive leishmanin test indicate?