In the late 1870s T. B. Wilson and his brother George began farming near the site of future Princeton. In 1881 the Missouri, Kansas and Texas Railroad Company extended its line from Greenville to McKinney, passing through land owned by the brothers. The name Wilson’s Switch was commonly used to designate the area. When residents applied for a post office branch, however, they learned that the name Wilson was already being used. The community then submitted the name Princeton in honor of Prince Dowlin, a landowner and promoter of the town. This name was accepted, and a post office was established in 1888.
In 1940, a camp of 76 cabins was built west of Princeton to house up to 400 migratory workers, who came to work during the onion and cotton seasons. In February 1945, the site became a prisoner of war camp for Germans prisoners captured during the Second World War. The local farmers paid the POWs to work on their farms. This operation continued for eight months. Under a special bill, the German prisoners were contracted to work on the City Park located across from city hall. The park was built as a living memorial and shrine to those who served and died during World War II. The Community Park/WWII P.O.W. Camp is located at 500 West College Street.
Members of the Princeton Independent School District and the Princeton Lions Club have teamed up annually to hold the Princeton Onion Festival. It is a major festival for the town that began in 2005 and is expected to occur on the fourth Saturday of April each year. Festival events include a 5K run, tennis round-robin, craft show, auction, raffle, onion cook-off, and food vendors.
Princeton Independent School District serves Princeton, Texas. The district covers 60 square miles serving not only the city of Princeton but also the surrounding communities of Culleoka, Lowry Crossing, Branch, Climax and the west side of Lake Lavon.