Chillicothe is on U.S. Highway 287, State Highway 91, Farm Road 2006, and the Fort Worth and Denver and Santa Fe railroads in eastern Hardeman County. It was founded in the early 1880s and developed rapidly after the construction of the Fort Worth and Denver City Railway in 1887. The community, named by A. E. Jones for his hometown in Missouri, grew up on Wanderer's Creek near the headquarters of W. H. Worsham's R2 Ranch in the 1870s. The post office was established in 1883 with Charles E. Jones as postmaster. A fire destroyed the town in 1890, and citizens rebuilt south of the rail line rather than north. Pioneers include Sam L. Crossley, who became the first mayor in 1903, J. J. Britt, J. A. Shires, and W. L. Ledbetter. Wheat elevators were constructed in 1892–93, and the town was incorporated in 1907 with a population of 800. Additional rail service from the Kansas City, Mexico and Orient Railway began in 1908. Chillicothe is called the Iris Village because of the many iris gracing the town. The population was 1,411 in 1950, 1,161 in 1960, 1,116 in 1970, and 1,052 in 1980. Chillicothe has a hospital, a library, a newspaper, and other businesses. In 1990 the population was 816, and in 2000 it was 798.