Otter Tail City began as a waystation on a fur-trade route between Saint Paul and the Red River valley. The settlement was of sufficient size that when the Minnesota Territory established a US land office for this part of the territory, the office was sited at Otter Tail City. Thus, the city was named as the seat when the county was organized, but people had begun settling the future Fergus Falls area in 1857, and it grew sufficiently that in fall 1872, the vote was taken to move the county seat there. The Northern Pacific Railroad had initially planned to run a line through Otter Tail City, but complications caused the line to be placed in Fergus Falls, which precipitated the county seat move. The Soo Line later made plans to run a line through Otter Tail City, but when townspeople could not agree on the routing, another route east of the city was constructed. Thus, a new city plat was generated, with the settlement name changing to Ottertail.