The town was originally named Gibbstown after William Gibbs, but was later renamed Collingwood for Admiral Cuthbert Collingwood, Lord Nelson's second-in-command at the Battle of Trafalgar. During the gold rush era of the 1850s the town's population surged and the suggestion was made that it be established as New Zealand's capital. The town was substantially damaged by fire in 1859 and again in 1904.
Collingwood Area School is a composite school (Years 1–13) catering for primary, secondary, and adult education in the greater Collingwood area, and has around 130 students on roll. The school celebrated its 150th anniversary in 2009.