A post office was established in 1888, and by 1890, the town had a general store, two cotton gins, a gristmill, a sawmill, a blacksmith, and an estimated population of 30.

During the 1920s, however, the community declined; in the early 1930s, Powderly had a church, a school, six rated businesses, and a reported 63 residents.

In 2010, the Powderly census-designated place included land east of the traditional townsite and reported a much larger population, at 1,178.

Powderly is located on U.S. Highway 271, 10 miles (16 km) north of Paris in north-central Lamar County.

[3] The center of town is on a low ridge, draining west to Pat Mayse Lake and east to Pine Creek, a tributary of the Red River.

[16] Camp Maxey Texas Army National Guard training facility, 8 miles (13 km) north of Paris, is located in north-central Lamar County, along the southwest side of Powderly.

The installation serves as a training center for the Texas National Guard, and most of the original buildings were demolished or sold and removed; in 1990, the camp's sewage treatment plant was used by the city of Paris.

The varied terrain provided facilities for working out problems of infantry training to meet modern battle conditions.

Facilities in these areas include boat ramps, campsites, restrooms, swimming beaches, and trailer dump stations.

[19] The Texas Education Code specifies that all of Lamar County is in the service area of Paris Junior College.