The main village of the town, where 381 people resided at the 2010 census, is defined as the Bennington census-designated place (CDP), and is located on the Contoocook River at the intersection of New Hampshire routes 31 and 47.
Situated in an area once called Society Land, the town was formed from parts of Deering, Francestown, Greenfield and Hancock. It was named to commemorate the 1777 Battle of Bennington, an American Revolutionary War battle fought in New York near Bennington, Vermont. Bennington, Vermont in turn derived its name from New Hampshire governor Benning Wentworth. The town was incorporated in 1842. The first census, taken in 1850, recorded 541 residents.
Located at the Great Falls of the Contoocook River, which drop over , Bennington provided water power for mills. The first gristmill was built in 1782, with a cotton mill in 1810. A tannery and tool manufacturing industry would follow. A factory with paper-making machinery was established in 1835, located at or near the site of the present-day Monadnock Paper Mill. In 1858, the town's industries included a cutlery manufacturer, a gristmill, 2 paper mills and a sawmill. Bennington also had quite a number of farms.
In 1874, plans were underway to build the Peterborough and Hillsborough railroad through Bennington.