The municipality covers an area of 2,903 square kilometres (1,120.9 sq mi), and was created by the Northern Territory government on 6 September 1985.

In addition to its services, Litchfield Council has adopted a Tourism and Events Strategy 2021-2024 https://litchfield.nt.gov.au/system/files/uploads/files/2020/Litchfield%20Council%20Tourism%20and%20Events%20Strategy%20-%20FINAL.pdf and, in its Municipal Plan 2021-22, committed to develop a youth strategy and action plan https://litchfield.nt.gov.au/system/files/uploads/files/2021/Litchfield%20Municipal%20Plan%202021-22-online.pdf The original inhabitants of the Litchfield area were the Larrakia, Wulna (or Djerimanga) and Djowei Aboriginal people.

Litchfield is named after Frederick Henry Litchfield who with William Patrick Auld was a member of an early survey and settlement party and who explored areas of the Northern Territory from Escape Cliffs in Van Diemen Gulf to the Daly River.

In 2015 the entire Litchfield council and mayor Allan McKay was sacked by then NT Local Government Minister Bess Price amid allegations of bullying, misuse of funds and budget blow-outs.

[6] Consistent with its legislative requirements under the Local Government Act 2008, Council undertook an electoral review in May/June 2020, with a formal recommendation put forward to the Minister for Local Government, Housing and Community Development, for the Litchfield Council area to be divided into three (3) wards, North, South, and Central.