From the Middle Ages to the German Mediatisation Holzhausen - as it was called then - was a "Reichsdorf" (village of the empire) with a 2/3 status of imperial immediacy, but apart from that was subordinated to a multitude of lords. After the introduction of the rule "Cuius regio, eius religio" by the "Peace of Augsburg" treaty this led to a convoluted separation of religious affiliations. Starting with the 16th century flax weaving mills became the main economic base for Burgholzhausen. Alongside the village's population lived on the processing of loam from their own quarries to produce pavers, oven- and wall-tiles. Later on in the 17th century fruit growing was introduced. In 1716 a catholic church of baroque style was erected.