Established as a service centre for the Hazelwood Power Station, Churchill was intended to house workers in the region as the State Electricity Commission of Victoria expanded its coal mining operations.

Announcing the commencement of construction, Minister for Housing Lindsay Thompson claimed that "it was doubtful whether any Victorian town had been more carefully planned.

It was relatively free from air pollution, is not above rich coalfields and is in close proximity to the larger towns and power stations in the Latrobe Valley.

The Churchill Newsagency business was later purchased in April 1978 by Jack and Olive Robson[4] The town was planned by Melbourne architect Best Overend[6] with a well-defined commercial centre, expansive parklands, a mix of government and privately owned quarter-acre (1,000 m²) town blocks and light industrial estates spaced from residential areas by a belt of parkland.

This, combined with the slow development of services in the town and prohibitive residential sales conditions meant that the Churchill project would never be fully realised.

Signs of renewed growth have appeared, with several new housing estates being released during the past decade, especially after the regional tree change population boom due to the COVID-19 pandemic.

Lit deliberately on Glendonald Rd, these fires burnt the surrounding hills of Churchill through to Yarram and killed eleven people.

Thompson claimed the town would “prove a fitting town to bear the name of a man whose leadership, courage and oratory lifted the free world from the depths of despair to the heights of victory.” [2] This decision was not universally popular, and Hazelwood residents were soon lobbying to retain the established local name.

The Churchill "Cobras" Cricket Club play at the George Cain Oval, located at Andrews Park West.