There are two versions of how Butler County was named. One version claims it was named after William Orlando Butler, a Kentuckian who declined an appointment to become the first territorial governor of Nebraska. The second version states the county was named in honor of David Butler, who served as governor from 1867 to 1871.
Butler County's boundaries were defined by the Territorial Legislature in 1856. It was formally organized 12 years later when the population reached the required 200.
The first attempt to settle in this area was made in 1847 by the Waverly Town Company of Plattsmouth which built a house along the west bank of Skull Creek, today the site of Linwood. Skull Creek was named as such because of the number of human skulls that were discovered nearby. It was later determined the area was once an ancient village of the Pawnee tribe.
Within 10 years of the time the county was organized more than 2,500 settlers had moved into the area. True to the pioneer tradition, the valleys were inhabited first as they provided protection. Settlement of the hills and table lands quickly followed.
The original county seat was designated as Savannah, located near the northern border along the Platte River. A hotel, two stores, a blacksmith shop and a courthouse made Savannah a thriving village. Settlers, however, wanted a more central location for their courthouse. A four-year struggle and four elections would follow. Finally, the fourth election gave a site called David City a majority vote of 39 to become the county seat. At the time, David City was little more than a wide expanse of prairie. In the fall of 1873 a modest courthouse was built on the site for $1,470. In 1890 a second courthouse was built and stood for 74 years.
In November 1962, voters in Butler County approved the issuance of $225,000 in bonds for the construction of a new courthouse. An additional $100,000 from investment funds and inheritance tax monies was pledged toward the project. The county dedicated its new courthouse 2½ years later.