Garwood is on State Highway 71 and Farm Road 950 in southern Colorado County. In 1896 Marcus H. Townsend, W. T. Burford, and T. A. Hill built the Red Bluff Irrigation System to attract rice farmers to the area, and by 1901 a number of local farmers were raising rice. Also in 1901 Ed R. Frnka moved the first building to the townsite; Townsend gave Frnka the land on which to place his building. The community's name was changed to Garwood in honor of Hiram Morgan Garwood, a Houston attorney and friend of Townsend. In 1901 the community's first church was organized, and a post office was established. In 1902 an additional building was moved to Garwood and used as a hotel. A school was begun in 1904. In 1906 Garwood was part of a land promotion fraud. Agents would show their victims photographs of crops, including orange groves, taken elsewhere but represented as being from Colorado County. The land was bought unseen, and most buyers left once they saw Garwood and the land around it. From 1909 to 1912 Garwood had two newspapers. A bank opened there in 1910, and that year the population of Garwood was 500. By 1915 the town had 750 residents and was serviced by the Gulf, Colorado and Santa Fe Railway. In 1922 fire destroyed most of the businesses on the east side of the main street. These were rebuilt, and the town thereafter grew slowly. In 1990 Garwood reported twelve businesses and an estimated population of 975. In 2000 the population remained unchanged, with thirty-seven rated businesses.