[3][4] Ponsonby was situated along the Garafraxa Settlement Road (which led from Hamilton to Owen Sound via Guelph) to an area known as the Queen's Bush.

This settlement road was another government plan to bring settlers to the area with an offer of 50 acres (20 ha).

The name Garafraxa is said to be a corruption of the word Sassafrax, a shrub that grew in the district.

Ponsonby was another of many small towns in which travellers could stop and rest for the night.

The original name of the town was "Thorpville", however it was changed in 1863 when James Halley took over the post office.