Rutland was officially incorporated as a town on June 18th, 1722.
The town was first settled by Europeans in 1666 and was originally called "Naquag," a name which came from Nipmuc. Officially founded in 1713, the Town of Rutland was made up of Barre, Hubbardston, Oakham, Princeton, and the northern half of Paxton. In Northern Rutland there are prison camps used during the Revolutionary War used for captured Hessian mercenaries hired by the British. The town's most famous citizen is Rufus Putnam, who was George Washington's chief engineer in the American Revolutionary War. He held various town offices in Rutland and served as Representative to the General Court. Later, he led a group of Revolutionary War veterans west to settle in the Northwest Territory and Putnam became known as the "Father of Ohio." The Rufus Putnam House still stands, and is now a B&B. It is depicted on the town seal.