The town of Schoharie has a village, also called Schoharie. Both are derived from the Mohawk word for driftwood. The town is on the northeast border of the county and is west of Albany and east of Oneonta and Cooperstown.
This area was long occupied by indigenous peoples. The first European settlements were by Palatine Germans in 1713, after the area was first explored in 1710/11. The Germans were among nearly 3,000 German Protestant refugees who sailed to New York in 1710, on ships arranged by Queen Anne's government. They were refugees from the religious warfare along the border with France, and also had suffered an extremely harsh winter in 1709.
Most of the Palatine Germans worked off their passage for several years in two work camps established along the Hudson River on property of Livingston Manor. When given land, they cleared and established farms. In 1723, 100 Palatine families from the 1710 immigration were granted land just west of Little Falls in the Mohawk Valley under the Burnet Patent. Palatine Germans founded other settlements in the valley as noted in names such as German Flatts and Palatine Bridge. These frontier settlements were vulnerable to attack during the French and Indian War and the American Revolution.
During the Revolution, most of the buildings in the town were destroyed by British raiders and their native Iroquois allies. The Schoharie valley was also considered a bread basket because of the amount of wheat produced during the war.
Schoharie was first known as a district in Albany County before Schoharie County was organized. As a town formed in Albany County in 1788, it became the founding town of the newly created Schoharie County in 1795. In 1797, part of the town was used to form the towns of Blenheim, Broome, Cobleskill, and Middleburgh. Similarly, area for the towns of Esperance and Wright were removed from Schoharie in 1846.
Schoharie has continued since its early settlement as a largely agricultural community. Cheesemaking and the dairy industry were important in the 19th century, when products were sold to New York City. Artisan cheesemaking and related trades have been of increasing importance since the late 20th-century.
On August 28, 2011, the town of Schoharie was flooded by Hurricane Irene. Schoharie Creek rose to record levels and was categorized as a 500-year flood, resulting in massive destruction of roads, homes, and businesses within the Town. Due to the devastation, federal agencies such as FEMA and the National Guard were called in to assess damages and provide relief, shelter and assistance to affected residents. The Town of Many farms in the area suffered severe economic losses due to animals lost or drowned in flood waters, barns deemed unusable, and fall harvest crops ruined.
The Becker Stone House, Becker-Westfall House, The Colyer House, Sternbergh House, and Westheimer Site are listed on the National Register of Historic Places. The Abraham Sternberg House was added in 2010.