The settlement was originally known as "Unashta Zinga," meaning "little stopping place" in a Native American language. The site that became Bancroft was homesteaded in the mid-1870s by Ford Bella Barber and Deborah (Watson) Barber, who came from Maine to settle in Nebraska. In 1880, when the Chicago, St. Paul, Minneapolis and Omaha Railway began planning a line through the area, the Barbers deeded of land to the railway for the platting of a town. At that time, the approximately 25 residents were of mostly German, Irish, and Scandinavian descent; some were immigrants. When the village was platted, townspeople named it Barbersville, but the couple refused the honor. The village was named after George Bancroft. Sources differ on who this was. In her 1925 "Nebraska Place-Names", Lilian Linder Fitzpatrick says that it was historian George Bancroft. However, more recent sources say that the Bancroft whose name was used was "a well-liked civil engineer with the railroad".