Canton was surveyed as early as 1840 by a company of men under Dr. W. P. King. The community stands on the original survey of Jesse Stockwell, who arrived in the area at that time. No settlement was made until 1850, when the town was laid out and named by settlers moving from Old Canton in Smith County. The first district courthouse at Canton opened in 1850, and a post office, the county’s fourth, was established in that year. When the Texas and Pacific Railway was built across the county in 1872, it missed Canton byten miles, and the citizens of Wills Point persuaded county officials to move the county seat there. In the resulting dispute, in 1877 armed residents of Canton went to Wills Point to recover the records, and the county judge wired Governor Richard B. Hubbard for aid. The Supreme Court of Texas finally decided in favor of Canton. Unwilling to use the railroad at Wills Point, Canton businessmen established Edgewood, ten miles (16 km) to the northwest of town, and built an extension to the railroad at a siding formerly called Stevenson. Property for the town’s first school, the Canton Academy, was acquired in 1853. Sid S. Johnson began publication of the Canton Weekly Times, the county’s first newspaper, in 1860. A Grange was founded in 1876. By 1890 Canton had a population of 421, flour mills, sawmills, cotton gins, and a bank. Brick buildings were under construction by 1892, and a new brick courthouse was completed in 1894. Iron ore and anthracite coal were discovered in 1887 and 1891. By 1896 the town reached a population high of 800 and had several churches, a steam gristmill and gin, two weekly newspapers, three general stores and two hotels. But the population had fallen back to 421 by 1904. Canton was incorporated in 1919, and elected a mayor and aldermen. Despite the Great Depression, development of the Van oilfield after 1929 brought further expansion. A Public Works Administration project in the 1930s saw the completion of a new courthouse. In 1933 area schools registered 500 white and twenty-eight black students. The population reached 715 in 1940, but dwindled again after 1949. In the 1950s, local business included a sweet-potato curing plant, an ice factory, a concrete-tile factory, lumberyards, and a cotton gin.
Expansion of the Canton city limits doubled its territory in the 1960s. In 1970 the community had a municipal lake with recreational facilities, seven churches, a school, a bank, a library, a newspaper, and eighty-six businesses. The population doubled between 1960 and 1970 from roughly 1,000 to 2,000, and reached nearly 3,000 by 1990. The population was 3,292 in 2000. However, when the city council decided to recount the population, they found that the town had 5100 residents instead of the previous census total of 3,292. Canton is known for its First Monday Trade Days. According to various sources, the tradition began with district court meetings held on the first Monday of each month, or with the monthly visit of neighbors in the Confederacy period. The custom began with the swapping of surplus stock by barter and grew to include casual bargaining for or swapping of dogs, antiques, junk, and donkeys on a 30-acre grounds. It is so immensely popular, that Canton goes from a town of 5,100 to a town of over 300,000 during the first Monday weekend, making it the largest flea market in the world. In the past, due to the success of First Monday, the city of Canton had no property tax, however, as of 2006, that is no longer the case.