The town, originally part of Plymouth, Connecticut, and referred to as 'Plymouth Hollow' was first settled by Henry Cook ("the soldier in the wilderness," 1683–1750) around 1728. The town is known for clockmaking, which started in 1803, when Eli Terry established a factory in the town. Terry brought mass production to the clockmaking industry, helping to reduce the cost of clocks. He introduced and patented the shelf clock in 1814, which reduced the cost of a clock from $25 to $5. His clocks were sold throughout the US. It was incorporated in its own right and under the name "Thomaston" in 1875. The name derives from Seth Thomas, the early clockmaker, who established a factory in town in 1812. The Seth Thomas clock factory building still exists; however, the clockmaking industry has long since left the state as well as the country.

According to the United States Census Bureau, the town has a total size of 12.2 square miles (31.7 km²). 12.0 square miles (31.1 km²) of it is land and 0.2 square miles (0.6 km²) of it (1.80%) is water.

The town is located at the confluence of the Naugatuck River, Northfield Brook and Black Rock Brook, and is protected by Army Corps of Engineers flood control dams on each of these watercourses. These were all constructed in the years immediately following the devastating flood of 1955 which ravaged the town as well as the state in general.

As of the census of 2000, there were 7,503 people, 2,916 households, and 2,067 families residing in the town. The population density was 624.7 people per square mile (241.2/km²). There were 3,014 housing units at an average density of 251.0 per square mile (96.9/km²). The racial makeup of the town was 97.85% White, Hispanic or Latino of any race were 1.45% of the population, 0.60% African American, 0.11% Native American, 0.49% Asian, 0.02% Pacific Islander, 0.41% from other races, and 0.53% from two or more races.

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