The townsite of Margaret River is located on the Margaret River from which it derives its name. The Margaret River itself was named in 1831 by John Garrett Bussell on one of his early exploration forays. The name is first shown on a map of the region published in 1839.

Margaret River was declared a townsite in 1910 and gazetted on February 7th, 1913. In 1910 the Margaret River Progress Association wrote to the Minister for Lands requesting a townsite be declared at "the Upper Margaret Bridge". The reason given was that "the district is likely to be dotted with public buildings several miles apart in the near future if a townsite is not made available shortly". The District Surveyor who inspected the area preferred an area near the lower bridge on Caves Road, but this land was not available. Lots were surveyed in 1912, and the Townsite of Margaret River gazetted in 1913. In 1918 the name of the townsite was changed to "Margaret", but it was changed back to Margaret River in 1927, due to local usage of the name always being Margaret River.

Source: This is an extract from the company's own website.