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The name of Douglas was first given to the territory of the town in the year 1646. New Sherborn or “New Sherborn Grant” had previously been its designation, since its first occupancy by the English settlers which was as early as 1715. The first English settlers came primarily from Sherborn, although many hailed from Natick as well. New Sherburn was removed from Suffolk County (or Middlesex county?) to Worcester County at its formation on April 2, 1731. The name Douglas was given in 1746, when Dr. William Douglass, an eminent physician of Boston, in consideration of the privilege of naming the township offered the inhabitants the sum of $500.00 as a fund for the establishment of free schools together with a tract of 30 acres (12 ha) of land with a dwelling house and barn thereon. It is said that there were subsequent pledges made by Dr. Douglas in the form of a bell for the Center School and 50 sterling pounds for seven years to support the ministry but quite a portion of these pledges were not received by the Town.

Douglas’s forests gave rise to a woodcutting industry and the Douglas axe company. A woolen manufacturing company, on the Mumford River in East Douglas, in recent times held by the Schuster family, has been prominent in the history of this community. General Lafayette, of France, stopped here during the Revolutionary War, to change horses, on his way to Boston to join General Washington. Lafayette was a hero of the American Revolution and the French Revolution.

From a very early period reaching beyond 1635, bands of Native Americans, principally the Nipmuc tribe, dominated this region of Worcester County. The Blackstone River was once called the Nipmuc River. Most of Douglas is part of the Blackstone River Valley National Heritage Corridor.