Nevada is on Farm Road 1138 two miles east of Lavon Lake in southeastern Collin County. The rich soils of the Blackland Prairies and the water provided by Bear Creek attracted settlers to the area as early as the mid-1840s. The first organized community in the area was McMinn Chapel, established in the early 1840s four miles north of the site of present Nevada. For the most part the residents of the community were the family and friends of its founder, John McMinn. In 1861 Granville Stinebaugh moved to Texas from Missouri and purchased 160 acres of land near McMinn Chapel. Shortly thereafter the town of Nevada was established on his farm and named by Stinebaugh in honor of Nevada Territory, which he had passed through on his way to search for gold in California. The town received a post office on August 3, 1880. Eight years later the tracks of the St. Louis Southwestern Railway reached the community. In 1889 Nevada incorporated, choosing an aldermanic form of government. From the 1880s to the 1920s Nevada served as a retail market for a small but populous farming territory. The population of the town grew from an estimated fifty in 1885 to 578 in 1920. By 1925 Nevada provided its 625 residents with paved roads, electricity, a telephone exchange, twenty-five businesses, and a high school. On May 9, 1927, a tornado struck the town. Twenty-seven people were killed, seventy-five were injured, and approximately $1 million in property damage occurred. Nevada never recovered from this disaster. The Great Depression and the mechanization of farming further retarded the growth of the town. By 1950 the population had decreased to 386, and it remained near this figure for the next thirty years. In 1980 Nevada had an estimated 400 residents served by four businesses. In 1990 the population was 456. The population was 563 in 2000.