Fredonia is just south of the junction of State Highway 71 and Farm Road 386, near the McCulloch-San Saba county line in northern Mason County. Nearby is the 200-foot-high granite formation known as Spy Rock. Early settlers began arriving in southwestern San Saba and northern Mason counties in the late 1850s. Among the earliest were Jack and Caroline Lathum and Chaney and Isabella Couch, who settled near Deer Creek with their families around 1858 or 1859. After the Civil War the population increased. An early school, called Hayes and Lathum School, was established, and in 1874 a church and school building were erected. That same year the community petitioned the county to rename the school Deer Creek School. To achieve this, it was necessary for the community to reorganize as a school community called Deer Creek and to provide a stone school building and other facilities. A school was erected and furnished in 1877 for approximately $800, and its name was legally changed in 1878.
The first post office in the area, named Deerton, was established in San Saba County in the home of William L. Hays on March 17, 1879, by his brother, Samuel Parker Hays, who was the first postmaster. William renamed the office Fredonia on June 8, 1880, as there was another Deerton in Texas. John C. Calhoun built one of the community's first stores, which later housed the post office, and became postmaster in 1882. He eventually moved the post office two miles across Lost Creek into Mason County, and the community thereafter became centered in that county.
This rural market community was a stage stop in the late 1880s. An early gristmill-gin was established by J. A. Williams and Sons, and the community once had a cooperative store run by the Grange. In addition, at one time the town had several churches, a general store, a drugstore, and a blacksmith shop. The community also had its own newspaper, the Fredonia Kicker, which was published by a man named Robertson in his home for a short time. The paper was absorbed by the Mason County News in 1910. Telephone service was established by 1914.
In the twentieth century Fredonia's economy gradually changed its emphasis from cotton farming to peanut farming, and numerous small landholdings were gradually consolidated into larger ones. The population peaked at an estimated 200 in the 1920s and dropped to 110 by the mid-1960s. It was 74 in 1968 and 50 in 1990 and again in 2000. In the mid-1980s the town had a post office, a church, and a filling station.