[2] The first settlement at the site of Colorado City was called Greenhorn after the name of an 18th century Comanche chief (Cuerno Verde in Spanish).

In 1845, mountain man John Brown, his wife Luisa Sandoval, and several children established a trading post where the Trapper's Trail to Taos, New Mexico crossed Greenhorn Creek.

In 1853, Lt. Edward Griffin Beckwith, an army officer, said of Greenhorn, "six New Mexican families had built an irrigation system to divert the water from Greenhorn Creek to water their crops of corn, wheat, beans and watermelon.

The United States Census Bureau initially defined the Colorado City CDP for the 1990 United States Census.Colorado City is a metropolitan district, a type of special district established under Colorado law.

The metropolitan district operates Lake Beckwith, which provides recreational opportunities for residents and visitors.