The town site was laid out in 1869, with agriculture and agriculture-related industries making up a large base of the economy.

It later moved to the northwest corner of Sibley Avenue and Second Street, to a clothing store owned by the town's first official postmaster.

[8] Later, his investments provided the means for building a more southern line through Meeker County to Breckenridge.

The village of Litchfield was originally called several different names, including "Round Lake", "Ripley", and finally "Ness".

[citation needed] The people of Ness were permitted to vote on the actual chartered village name of their township.

The first village council meeting was held on April 5, 1872, in the railroad's land office.

[9] By 1871, the village had grown to double the population of Forest City, a community 7 miles (11 km) to the northeast.

In addition to Litchfield, the railroad in the 1870s put immigrant houses along its lines in villages including Willmar, Benson, Morris, and Breckenridge.

Newly arriving immigrants were given shelter in the reception houses and the chance to buy food and clothing at cost from the railroad while they looked for land in the area.