When Grayson County was created on March 17, 1846, by the first Legislature of the State of Texas, the county seat was named in honor of Sidney Sherman, an heroic leader at the Battle of San Jacinto and in the affairs of the Republic of Texas. Commissioners Micajah Davis, George C. Dugan, Richard McIntire, James Shannon, and James G. Thompson were appointed to select possible courthouse sites within 3 miles of the county center, and this site on the old Cherokee Trail and the road to the important river crossing at Preston Bend won voter approval. Townsite lots were auctioned late in 1846, and Chief Justice James G. Thompson supervised construction of the courthouse under a contract awarded in Jan. 1847 to M. L. Webster. Completion of the structure was marked by a Fourth of July picnic with barbeque, a barrel of whiskey, music, and dancing. Because water and wood for public use were scarce at this site, called "a bald prairie," State Representative James B. Shannon secured new legislation, and on Nov. 23, 1848, he and his business partner Samuel Blagg deeded an 80-acre Sherman townsite from their holdings to the county commissioners 5 miles to the east.