First granted in 1763, Lancaster was an early settlement on the northern portion of the Connecticut River subject to many Indian troubles. The town was named for Lancaster, Massachusetts, hometown of an early settler. Reverend Joshua Weeks, a grantee of the town, was among the group of explorers who named the mountains in the Presidential Range. Other grantees included Nash and Sawyer, who discovered the White Mountain Notch, making a shorter route to Portland possible.

Lancaster is home to the popular Lancaster Fair.