Castle Douglas is built next to Carlingwark Loch in which traces of prehistoric crannogs can be found, evidence of early inhabitation of the area. To the North of the town Glenlochar is the site of two successive Roman forts, the first being erected during the invasion of Agricola and the second during the Antonine period, they appear to have been for cavalry units and evidence has been found that a "victus" grew up around them, they were abandoned completely about 160.
Nearby Threave Castle was a seat of the powerful "Black" Earls of Douglas. A small collection of cottages developed by the shores of Carlingwark, which was a source of marl. These cottages can still be seen on the Western approach to Castle Douglas and are known as The Buchan. The development of a military road through Galloway, built by General Wade after Jacobite rising of 1745, passed through the Carlingwark area and improved transportation connections in the 18th century.
Castle Douglas was founded in 1792 by a wealthy descendant of the Douglas family, William Douglas, who made his money in an 'American Trade' and created a planned town on the shores of Carlingwark Loch. The town's layout is based upon the grid plan pattern of streets as used in Edinburgh's New Town, built around the same time. Sir William Douglas also created a number of industries in Castle Douglas, including hand-woven cotton factories from which Cotton Street derives its name.
The completion of the Castle Douglas and Dumfries Railway in 1859 further improved the town's connections, and it soon developed into a major market town for the surrounding area. This is still true today and the 1900 hexagonal market building is in constant use. Although the railway was closed in 1965 the A75 trunk road was developed roughly following the lines of the original military road and passed through Castle Douglas. The many hotels and pubs which derived from coach stops are an indication of the town's importance as a stopping place for travellers.
Castle Douglas was a reception area for Glasgow's evacuated children during World War II. From March 1943 to April 1944, the town was the base for 92nd (Loyals) Light Anti-Aircraft Regiment, Royal Artillery, which was training for Operation Overlord, the invasion of occupied Europe.
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