The current town square of Coldwater is approximately two miles south of the Coldwater River, hence the name. The original town began in 1856, called the village of Elm Grove. Construction of the Mississippi and Tennessee Railroad through here in 1858 stimulated development. Rows of stores and other businesses developed on both sides of the tracks, along with houses of worship. Coldwater was officially incorporated in 1872. At that time, the Town was located in DeSoto County and was a mile square, with the railroad depot at the center. The area was developed for cotton plantations and Coldwater became a trading center.