Lipan is at the intersection of Farm roads 4 and 1189, sixteen miles northwest of Granbury in the northwestern corner of Hood County. Though settlers began moving into the area during the early 1850s, the settlement was not formally established until 1873, when T. A. Burns laid out a townsite at the intersection of the roads connecting Weatherford to Stephenville and Granbury to Palo Pinto. He called the new community Lipan, after the Lipan Apaches, who reportedly had used the surrounding territory as a hunting ground earlier in the century. Fertile soils attracted settlers to the area, and the nearest community was twenty miles away. Lipan received a post office in 1875. By the mid-1890s the community had a school and several businesses, including two blacksmith shops and two cotton gins. Its population by 1900 was 286. In 1936 it had 300 residents and eighteen businesses. Unlike many small communities, Lipan grew during the Great Depression and World War II. Its population reached 350 by the late 1940s, when the town had twenty-one businesses. In the late 1960s the community reported 399 residents and sixteen businesses. A slight decline during the 1970s was offset by growth in the next decade. The population was 512 in the late 1980s, when fourteen businesses served area residents. In 1990 the population of Lipan was 354. The population grew to 425 by 2000.