The Mancos area is dotted with inventoried and uninventoried archeological sites, including both isolated houses and shelters and small village complexes.

Mancos Valley residents were probably among those who withdrew to the cliff dwellings on Mesa Verde, perhaps for defensive purposes, due to climate change, or as part of concentration policy of possible invaders and occupiers of the region.

Archaeological sites of the ancient Pueblo period include: Control of the area was contested by nomadic Navajo and Ute people for centuries.

By some unverified accounts, the name Mancos refers to the crippled nature of the Spanish explorers' horses after they crossed the San Juan Mountains.

Part of the original Ute Reservation in 1868, Mancos was part of the San Juan Cession of 1873, and cattle ranchers began settling the Mancos Valley in the 1870s, providing cattle to the mining camps of the San Juan and La Plata ranges.

Today, the boundary of the Ute Mountain Indian Reservation is located some 6 miles (10 km) south of town.

At the time it was founded, Mancos served as the primary commercial trading center for eastern Montezuma County, rivaling the town of Dolores to the northwest.

Ranchers in the Mancos Valley continued to provide beef, timber, and other agricultural products to the mining camps.

Following this, Latter-day Saints colonists moved into the area and established farms and small communities such as Weber and Cherry Creek.

Local farmers and ranchers began constructing irrigation canals to bring water from the Mancos River to cropland and pasture in various parts of the Mancos Valley in the late 1870s and 1880s, and by the beginning of the 20th century a large network of irrigation ditches and laterals was operating and continues to operate (with improvements) today.

Many of the original irrigation ditches have been determined to be eligible for the National Register of Historic Places, together with various archeological sites.

Several Mancos sites from about the turn of the 20th century are listed on the state or national register of historic places.

Aramark, the concessionaire for Mesa Verde National Park, has facilities in the town, and there is a specialty aspen sawmill (Western Excelsior) and other small industrial enterprises.

Several major subdivisions immediately adjacent to Mancos are in various stages of development and are expected to greatly increase the town's population by 2015, despite some slowdown due to economic conditions.

According to the United States Census Bureau, Mancos has a total area of 0.6 square miles (1.6 km2), all of it recorded as land.

The highly publicized death of a schoolchild in 2003 led to a major reconstruction of US 160 through the town in following years, creating a street pattern which somewhat hampers development.

Much of the townsite is located in a Special Flood Hazard Area (the 100-year floodplain)), including most bridges connecting the two parts of the town.

As is common in Colorado, many government services are provided by special districts, both inside the corporate limits of the town of Mancos and outside in the county.

The nearest general aviation and commercial airport is located southwest of Cortez, approximately 22 miles (35 km) west of Mancos.

There are a few private airstrips in the vicinity of Mancos, but these are not open to the public; a former town airfield near Jackson Gulch Reservoir is sometimes still marked on maps.