Capay is located on the Mexican land grant Rancho Canada de Capay. Capay was originally named Munchville after one of the first white settlers, a man named Munch, who built a house on the Cache Creek at the site in 1857. Mr. Empyre and Mr. Munch built a two-story building in the area. The town acquired the name Langville after John A. Lang. In 1870 Lang operated a hotel and owned a brick yard and a store. Langville grew enough to have a town plat filed on January 1, 1875, which renamed the town as Capay.