The earliest European settlers in the Margaretville arrived just after the Revolution. Once known as Pakataghkan, or ‘the meeting of three rivers’, the early village was named Middletown Center. In 1850 it was re-named Margaretville in honor of Margaret Lewis, a granddaughter of Robert Livingston, whose family once owned large portions of the Hardenburgh Patent, including the site of the village.
Margaretville began to develop as a village in the early 1840’s. Among the village’s earliest and most influential citizens was Dr. Orson M. Allaben. Allaben was born in 1808 near the village of Delancey and began his practice in Dry Brook. He married Thankful Dimmick in 1839, and in 1843 he acquired land in what became the core of the village of Margaretville from Salmon Scott. In 1845 Allaben built a Main Street residence and office, which also served as the location of the first village store. He also ran a printing press and established the village’s first newspaper, the ‘Utilitarian’, in 1863. Allaben also held several public offices, serving as a supervisor for seven terms and as a member of the New York State Assembly (1840; 1870) and Senate (1864-65). He also sold off some of his land as building lots. Among the purchasers was David Ackerly, who built the Ackerly House Hotel in 1845 on the corner of Main and Walnut Streets, now near the center of the village.
The village developed rapidly between 1843 and 1869. The Beers map of that year depicts about 80 buildings, mostly along Main Street, and a scattering of buildings on parallel or intersecting streets. While Main Street was laid out on the north side of the East Branch of the Delaware River, a small channel, known as the Binnekill, has been diverted from the river closer to Main Street to serve the village’s industrial concerns. Development included a mixture of industrial, residential and civic buildings. In addition to tanneries, foundries, and saw mills, early businesses included a cobbler shop, wagon shop, harness shop, cooperage, cabinet and paint shop, and a blacksmith shop. Social and civic enterprises included a post office and school, several doctor’s offices, the Methodist Church (built in 1851) and the Margaretville Masonic Lodge and the Odd Fellow’s Pakatakan Lodge, both organized in 1855. There were still several farms in and around the village, as well as a few hotels and a cemetery.
As with much of the Catskills, the development of Margaretville was influenced by the coming of the railroad. During the 1870’s the Ulster and Delaware, one of the major transportation routes connecting the Hudson River (and thus New York City) to Delaware County, Traveled northwest from Kingston to Phoenicia and then through Fleischmanns, Arkville, Kelly’s Corners, Halcottsville, Roxbury and beyond on its way to Oneonta. Located a few miles west of Arkville, Margaretville was just off the U&D line. However, in 1905 the Delaware and Eastern Railroad, later Delaware and Northern, was developed to extend the U&D line west from Arkville along the East Branch of the Delaware River with major stops in Margaretville, Dunraven, Andes, Downsville and East Branch, where it met the main line of the Ontario and Western. Margaretville was thus now connected with the two major railroads serving the Catskills region. The D&N located its terminal yards and shops at Margaretville and the railroad gave major impetus to both the agricultural and the resort industries in the village. Several creameries were built and, as in the adjacent town of Roxbury, butter was an important product. The Margaretville station also served as the point of departure from the local cauliflower crop. Introduced into the region in the 1890’s cauliflower became one of the town’s most important exports.
There were hotels or boarding houses in the village as early as the 1840’s. The largest boarding house, Briar Cliff Lodge, was situated on a hill overlooking the village. It was built as a sanitarium but never used for that purpose. Others were located in and around the village, including the popular Ackerly House on Main Street. Margaretville had become one of the most popular resort towns in the region and it remains a thriving community today.