Grazing licences were issued around Terowie during the early 1850s. Despite warnings that soils and climate in areas such as Terowie were unsuitable for farming, the grazing lands were subdivided into farm allotments in the early 1870s.
John Aver Mitchell purchased section 158, Hundred of Terowie in 1873 and subdivided it to establish the nucleus of the township. He obtained a licence for the Terowie Hotel, the first building, in 1874, and shortly afterwards a store and blacksmith were established.
The township was gazetted in 1877. It developed remarkably quickly and surrounding sections were also subdivided to extend the town boundaries. By 1881, the population had reached almost 700. From its foundation, Terowie was a major supply centre for the developing areas to the north and north-east.
Even before the arrival of the railway in 1880, each day saw the arrival and departure of horse and bullock wagons and coaches. Terowie became known as 'The Hub of the North' and it was reported that as many as fifty horse and bullock teams were in town at one time.
Shortly after the broad gauge line from Adelaide reached Terowie, it was linked by narrow gauge to Petersburg (now Peterborough) and Broken Hill to Quorn and the northern line. This was eventually extended to Alice Springs, and to Port Augusta and later through there to Western Australia. Terowie occupied a unique position within the rail network and all passengers and goods to and from the northern areas of South Australia and to most States came through Terowie to be transferred from one gauge to another.
The arrival of the railway coincided with mineral discoveries and mining operations in the Broken Hill-Silverton districts, which looked to South Australia as an outlet and for transportation. The development of vast north-eastern pastoral areas of South Australia saw Terowie become the centre from which supplies were drawn, and to which produce was delivered.
The railway yards at Terowie were immense, extending for a length of almost three kilometres including workshops, engine sheds, shunting lines, a turntable, and the trans-shipping yards. The yards were a hive of activity with railway employees and those employed by the trans-shipping contractors numbering several hundred. Terowie's population numbered over 2000 at its peak.
Between 1941-1946, there was a further increase in activity due to the establishment of a large military camp in and around the town to cope with the trans-shipping of men and materials to the north. In March 1942, General Douglas MacArthur gave his first Australian press interview in Terowie after his escape from the Philippines and it was here that he first issued the now famous statement "I came
In 1969 the broad gauge line was extended from Terowie to Peterborough and the station became a whistle-stop. With its major employment base gone, the town's population declined rapidly to about 130. The Barrier Highway, constructed at the same time, by-passed the town and Terowie's stores and shops closed. Itappeared that it would become a ghost town. With a final wrench, the rails that had become idle by the mid 1980s, were removed in 1990 - the rail was required elsewhere. Although almost all the workings and buildings in the railway yards were removed and demolished from the mid 1960s onwards, Terowie has retained a Main Street facade which has been described as unique in Australia.out of Bataan and I shall return."
The last years of the twentieth century witnessed a re-growth. The population has stabilised at about 200. New businesses have been attracted, and many of the historic buildings have been refurbished. In 1985 Terowie was designated an Historic Town - one of only seven in South Australia.
Terowie - The 'place of hidden water' has re-emerged nourishing and nurturing its heritage.