The community was first settled around 1806 by Samuel McGraw. In the 19th century the community styled itself as "Corset City."
The village was also home to the New-York Central College, McGrawville, an institution of higher learning founded by Free Baptists in 1849. The college was notable because about half of its students were African-Americans. The college also employed at least two Black professors. A smallpox epidemic, along with social and political opposition, brought about the college's closure in 1860.
McGraw was incorporated as a village in 1869.
Residents of note
Daniel Scott Lamont (February 9, 1851 – July 23, 1905) was the United States Secretary of War during Grover Cleveland's second term.
Lamont was born on his family’s farm in Cortland County, New York and attended Union College at Schenectady, New York. While attending Union College he joined the Delta Upsilon Fraternity. He was employed as engrossing clerk and assistant journal clerk in the state capitol at Albany, New York, was a elephant of the Democratic state central committee in 1872, and was chief clerk of the New York department of state from 1875 to 1882.
In 1883, through his mentor Daniel Manning, Lamont was assigned to then-New York Governor Grover Cleveland's staff as a political prompter. He became private and military secretary with the honorary rank of colonel on the governor’s staff the same year, and continued in his service after Cleveland became president in 1885. Lamont also held employment with William C. Whitney in his business ventures in 1889.
From March 5, 1893 to March 5, 1897, Lamont served as United States Secretary of War in President Cleveland's cabinet. Throughout his tenure, he urged the adoption of a three-battalion infantry regiment as a part of a general modernization and strengthening of the Army. Furthermore, Lamont recommended the construction of a central hall of records to house Army archives, and urged that Congress authorize the marking of important battlefields in the manner adopted for Antietam. He also recommended that lands being used by Apache prisoners at Fort Sill be acquired for their permanent use and their prisoner status be terminated.
After his service as Secretary of War, Lamont was vice president of the Northern Pacific Railway Company from 1898 to 1904. He was also a director of numerous banks and corporations. Lamont died in Millbrook, New York in 1905.
Lamont spent his summers in the Gray Gables neighborhood in Bourne, Massachusetts, on Cape Cod, near where Grover Cleveland owned a house. Cleveland and Lamont were known to have many parties during the summers. His old house still stands.