Caroline County is bordered by Queen Anne's County to the north, Talbot County to the west, Dorchester County to the south, Kent County, Delaware, to the east, and Sussex County, Delaware, to the southeast.
Caroline County was created in 1774 from parts of Dorchester and Queen Anne's counties. The county derives its name from Lady Caroline Eden, wife of Maryland's last colonial governor, Robert Eden. At the time of its creation, seven commissioners were appointed: Charles Dickinson, Benson Stainton, Thomas White, William Haskins, Richard Mason, Joshua Clark, and Nathaniel Potter. These men bought of land at Pig Point (now Denton) on which to build a courthouse and jail.
Until the completion of these buildings, court was held at Melvill's Warehouse, approximately above Pig Point. Elections and other business transactions were completed there, and the town became the center of the county. The first court session was held on March 15, 1774, at Melvill's Warehouse. In 1777, court was moved to Bridgetown (now Greensboro), but in the interest of convenience, court was moved back to Melvill's.
Disagreements arose concerning the permanent location of the county seat. The General Assembly reached a compromise in 1785 and ordered that of land at Melvill's Landing should be purchased for a courthouse and jail. In 1790, the county court and its belongings moved to Pig Point. The Caroline County Courthouse was completed in 1797.
The county has a number of properties on the National Register of Historic Places. The National Park Service is considering organizing a site in the southern half of Caroline County dedicated to interpreting the Underground Railroad.