Founded in 1825, Granbury started as a square and log cabin court house. It is generally considered to be a suburb of the Fort Worth. Many of the buildings on the square are now registered historic landmarks, including the Granbury Opera House, which still hosts Broadway productions. The city name originated from the Confederate General Hiram B. Granberry. Some scholars, to explain why the city name is spelled differently, believe the name Grandberry was misread y on a document, but recent findings have concluded that Granberry chose to spell his name Granbury. Recent expansion of the city was made possible by the damming of the Brazos River in 1969, which formed Lake Granbury, a long, narrow lake which flows through the city.
Granbury and Hood County are rich in Texas history. David (Davy) Crockett's wife, Elizabeth, settled in Hood County following the Texas Revolution against Mexico. Crockett, as well as other Alamo participants, received land grants. The Crockett family received land in what is now Hood County. Elizabeth Crockett is buried in Acton State Historic Site, the smallest state park in Texas. A large statue of Elizabeth Crockett marks her grave site. Several of Crockett's descendants still reside in Hood County.
John Wilkes Booth, according to Granbury legend, moved to Hood County and assumed the name of John St. Helen. There is a store on the historic town square that is still called St. Helen's.
English actor Peter Mayhew, who portrayed the wookie Chewbacca in four of the six Star Wars movies, resides in Granbury.
English musician Andy Parker, founding drummer of the legendary english rock group UFO resides in Granbury when he's not touring the world.