Sherwood was named by Captain William Briggs who had established a cattle station in the locality in 1839. Sherwood was a pastoral lease which was described by Major Oakes, in 1840, as:

‘a brushy and thick cedar, good alluvial ground.’

Oakes also noted that there was a weatherboard house, stockyards and piggery and five stands of firearms.

The settlement evolved as Sherwood after pre-selection in 1859. A school was begun in 1872 followed by two churches and a hall. A post office was established nearby in 1882.