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The Town of Shrewsbury, named for Shrewsbury, England, is a community with an uneven and hilly terrain cut by a number of minor streams providing several small water power sites. Grants of land were made in what would eventually be the town beginning in 1664, with the 3,200-acre (13 km²) grant called Haynes Farm as the largest. In 1664 Native American leader, Peter Jethro, and other Nipmuc Indians deeded land around Lake Quinsigamond to settlers in the area. Settlers came primarily from Sudbury and Marlborough, and the first permanent settler was Gersham Wheelock in 1720. As a town, Shrewsbury was first settled in 1722 and officially incorporated in 1727.

Townspeople created an agricultural economy with apple orchards, and by 1750, there were two stores and four taverns as well as several small industries in operation. The rapid fall of prices for agricultural goods, the shortage of hard currency, and the general economic depression following the Revolutionary War produced disastrous conditions for colonists. Shays’ Rebellion in 1786 sought to close the courts to prevent debt collections and the foreclosure of mortgages. Shrewsbury became a staging area for the rebellion and the encampment of the more than 400 insurgents, before the march on the Worcester Court House.

A leather industry began in 1786 in Shrewsbury, and town farmers developed large cattle herds to support the manufacture of boots and shoes. This was followed by the establishment of gunsmithing operations in 1797, which produced rifles, shotguns and pistols and eventually cutlery. Luther Goddard began in 1809 by making brass clocks and then established a small watch factory employing a few skilled Swiss and English watchmakers. Lumbering created sawmills, and they in turn drew chair and cabinet makers, plow and wagon builders.