Originally known as The Junction, Plainwell began primarily due to the plank toll roads built between 1852 and 1855 to join Grand Rapids and Kalamazoo. These plank roads were used for transportation of supplies, soldiers, and primarily for the stage lines to run more smoothly over the early Indian trails. After the stagelines discontinued their operation, Plainwell remained an important junction, as there were two major railroad lines, the Lake Shore and Michigan Southern and the Grand Rapids and Indiana, in use.
Another important factor in the development of Plainwell was the formation of the Plainwell Water Power Company in 1856. As a result, the millrace was excavated at a horseshoe bend in the Kalamazoo River, surrounding the area with waterways, making the center an island. Plainwell is now often referred to as "The Island City" because of this.
Named after Otsego Lake in New York, Otsego is a combination from Iroquois Indian. "Ot" means a meeting place, and "Sego" is a word of greeting. Local lore, however, tells a different story about the name Otsego. According to the tale, two Indians were in a canoe near the current location of Otsego. One pushed the other into the water proclaiming, "Out se go." Otsego began in 1831 when the Scott and Sherwood families settled at Pine Creek, now considered Otsego Township. In 1832, the post office was established and Otsego started to grow. The first school was established in 1833, and with the increased traffic in the area, the citys first bridge was constructed over Pine Creek in 1835. Otsegos retail trade began when the first general store opened in 1836. That same year many of the streets still known today were laid out.
In 1865, Otsego officially became a village. The area increased its transportation abilities when the first railroad line was laid in 1868.
Otsego reached the 1,000-population mark in 1880. In 1918 the Village of Otsego became the City of Otsego.
Otsego and Plainwell have a shared history in their city forefathers. The Sherwoods son, Giles, relocated to Plainwell on what is now named Sherwood Street.
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