The community was known early in its history as "Raquetteville." Norwood as it is known today, grew out of the shadows of Potsdam, New York in the 1870s. In 1871 the growing Potsdam hamlet became a village entered into existence as the "Village of Potsdam Junction."

Villagers later wanted to further distinguish the town by disassociating its name with Potsdam and submitted proposal to the federal government to become the Village of Baldwin but it was discovered that there was already a post office named Baldwin. A short time later, on April 15, 1875, a new name was voted on and Norwood was selected. The mayor of Norwood is currently^[when?] Tim Levison.

The Benjamin Gordon Baldwin House was listed on the National Register of Historic Places in 2004.^[3]