The municipality's territory was defined in 1714 when a region known as Chiapan, split into what is now Chapa de Mota and Villa del Carbón.

[2][3] The major portions of the municipality's glyph, which serves as it coat-of-arms, does not reflect the town of Villa del Carbón but rather two of its oldest communities: Taxhimay and San Lorenzo Pueblo Nuevo.

[2] Today, the municipality's economy is based primarily on tourism, as it has a number of streams, rivers and dams suitable for water sports, trout-fishing and camping facilities.

[5] The town of Villa del Carbón lies near the center of the municipality at an altitude of 2,600 meters above sea level[3] and has a population of 8,029 (2005 census).

[4] Most of the houses and other buildings in this town have white facades with pitched roofs covered in Spanish-style clay tile.

[6] To the side of the church is the Luisa Isabel Campos de Jiménez Cantú Municipal Park, which contains an open-air Greek-style theatre, surrounded by pine trees.

Zacapexco is located to the West of the municipal seat and is old enough to be mentioned in the Huamantla Codex which was written in the 16th or 17th century as one of the Otomí groups to have left the cave in Chiapan to settle on the Zacatepexco Hill.

[9] To the north of this community is the Taxhimay Hacienda, which was owned by a major textile family from Tepeji del Río.

In 1931, the Taxhimay Dam was built near here, which completely inundated the small village of San Luis de las Peras.

Much of the territory consists of rugged hills and mountains, with the high point being Cerro de la Bufa, at 3,600 meters above sea level.

[1] Most of the bodies of water here have been created by the El Llano, Taxhimay, Benito Juárez and Molinitos Dams, with only one natural lake called Santa Catarina.

[2] Early human settlement in the Villa del Carbón area is demonstrated by cave paintings at a rock shelter located near the San Jeronimo River.

The first known ethnicity to settle here are the Otomí, who called this area "Nñonthe" (top of the hill)[1] Evidence of their early occupation is found in the way of primitive ceramic and human and animal figurines.

As they did so, this area became known as the Otomí region of Chiapan, which rough correlates with the modern-day municipalities of Villa del Carbón and Chapa de Mota.

This region, along with neighboring Xillotepec (today Jilotepec) had significant influence in the early Mesoamerican world,[1] as it was located where commercial traffic between Tula and Teotihuacan passed.

Remains of these can be found today such as the fortifications at Cañada and Taxhimay, the ceremonial mound at El Mogote and a highly deteriorated and overgrown set of buildings known as Iglesias Viejas (Old Churches).

In the late 16th century, a number of Spanish families began renting lands from local chiefs here on which to raise cattle and sheep.

In order to identify the community, one would be directed to the Villa Nueva, en donde hacen carbon" (the New Village, where they make charcoal), which eventually led to the place being marked on maps simply as "El Carbón" and verbally, the phrase became contracted to Villa del Carbón.

[1] When the Mexican War of Independence broke out in 1810, Villa del Carbon and the surrounding communities did not immediately join in with Miguel Hidalgo's cause.

[1] In the years immediately following Independence, this municipality suffered from the lack of political stability, which led to high crime rates, especially highway robbery.

[1] Another important event in the history of Villa del Carbón is the arrival of the captured Melchor Ocampo in 1861 to be imprisoned at the Los Fresnos House.

During the French Intervention in 1863, Villa del Carbón sided with the Maximilian, forming a regiment led by Colonel Patricio Garnada to fight for the emperor.

[1] During the Mexican Revolution, there is some evidence that the town had recurrent problems the Liberation Army of the South, such as the severing of telegraph lines.

These rivers were dammed in the first half of the 20th century, originally for agricultural purposes but they have become an important source of tourism, including ecotourism revenue.

These dams offer a number of activities, such as mountain biking, hiking, rappelling, swimming, jet skiing, kayaking, canoeing, sailing and sport fishing, especially for trout.

It was constructed in 1934, flooding the valley and covering the small community of San Luís de las Peras, leaving only the church tower and part of the cupola visible above the water.

[9] The El Llano Dam is 20 km from the town of Villa del Carbón and is located within a state park, which is also part of the Zacapexco ejido.

This association now hosts national-level competitions at the Lienzo Charro Cornielio Nieto, located just outside the town of Villa del Carbón.

[12] With ranches and charreadas an important part of Villa de Carbón's history and culture, crafts related to these, especially leather-making and leather products.