One of the most notable settlers was Charles Polke, who was known as "the Indian Trader of the Potomac," according to the Web site www.hancockmd.com.
The original land mass was called Tonoloway Settlement because it was situated between the Tonoloway and Little Tonoloway creeks, according to historical documents.
The settlement also was known as Northbend because it rests in the crook of the Potomac where the river bends the furthest north, documents say.
In her book "Hancock, 1776-1976," Emily Leatherman says Joseph Hancock, a ferryman who transported passengers and commerce across the Potomac River, formally laid out a town in 1749.
In 1818, the National Pike opened in Hancock and the town prospered from the influx of travelers, according to historical documents. By 1839, the Chesapeake and Ohio Canal had arrived in Hancock, creating a second construction boom, records show.
The town was incorporated in 1853.
During the Civil War battle of Hancock, the town was under siege by Confederate Gen. Thomas "Stonewall" Jackson. On the evening of Jan. 5, 1862, Jackson's troops were across the Potomac River from Hancock. Records show his artillery fire did little damage to the town.
Union Brig. Gen. Frederick West Lander refused Jackson's request for surrender.
There was no bridge across the river at that time, records show. After trying for two days to find a safe river crossing, Jackson's troops retreated to Romney, Va., which now is in West Virginia.
The first bridge built across the Potomac was constructed in 1892, according to historical records.
The Western Maryland Railroad came to Hancock in 1905, records show.
Today, the Western Maryland Railroad no longer is in operation, but its route through the Hancock area still is used by visitors. The Maryland Department of Natural Resources paved over a 20-mile stretch of the rail line to create a hiking, biking and walking trail known as the Western Maryland Rail Trail.
Hancock Mayor Daniel A. Murphy said town leaders are using the Western Maryland Rail Trail and many other natural and historical amenities in and around Hancock to their advantage for economic development.
The town, with the help of the Chamber of Commerce, is trying to cater to tourist-based activities, Murphy said.
Hancock's population declined in the 2000 census to 1,700 people, he said. But despite the decrease in population, the town continues to prosper, he said.
"The downtown is undergoing revitalization, we have a positive relationship with the C&O Canal and we are looking for entrepreneurs to start small businesses," Murphy said. "Being a small town is not a disadvantage."
Next week: A look at Keedysville