The founding of the village of Gaylord is credited to William Washburn who extended the Minneapolis and St. Louis (M & St. L) railway from his flour mills in Minneapolis to South Dakota. Washburn established train stops along the way (typically every seven miles) and platted the towns along the railway. In October of 1881 M & St. L finally reached the village of Gaylord, which was named after E. W. Gaylord, a highly respected man working Mr. Washburn’s railroad company (Gaylord never actually lived in the area or town of his namesake). Two years later, in 1883, the first city elections were held and a petition was approved that incorporated Gaylord as a Village. Gaylord remained a village until 1947 when the community approved changing it to a city of the fourth class.

Gaylord was the prototypical small town of the early 20th century, being the agricultural trade center where townspeople’s livelihoods were dependent, directly or indirectly, on supporting farm trade territories and selling goods to farmers.