It is named for the large local lake, which for years has been a popular resort area. The lake is surrounded by numerous homes. Most are year round residences, although some summer cottages dot the shore. It is especially noted for two islands in its center, separated by a narrow, shallow strait (both of which have cabins).
The lake's name comes from the local Pequot Indian word for "lake with pierced islands". Some time long before the area was settled by whites, the tribe living there felt they were being cursed by their irritable Great Spirit. To try and appease him, the main chief agreed to sacrifice his daughter, who willingly threw herself into the lake and drowned. The tribe's shamans announced that never again would an Indian be killed on the lake.
Lake Pocotopaug is the largest inland body of water in Connecticut with 512 acres (2.07 km2).
The Indians were also known to have hunted on Spellman's point, a quaint street lined with cottages, using loud noises to scare the animals to the end of the peninsula, and thereby an effective way to gather food, however in the mid-to-late 1800's it was sold for a sack of bean to the "Bay point" society.
Sears Park is located at the lake and has various swimming, boating and recreational facilities for residents.
In recent years the lake has become a place of ecological study due to the large scale algae blooms that resulted in 2000. Tests have shown that longstanding shoreline development and fertilizer use are causing increasing issues. A town sanctioned Lake Commission and the Friends of Lake Pocotopaug are two organizations concentrating on improvement ideas.
According to the United States Census Bureau, the CDP has a total area of 9.0 km² (3.5 mi²). 6.9 km² (2.7 mi²) of it is land and 2.1 km² (0.8 mi²) of it (23.28%) is water.
As of the census of 2000, there were 3,169 people, 1,347 households, and 844 families residing in the CDP. The population density was 456.6/km² (1,183.9/mi²). There were 1,532 housing units at an average density of 220.7/km² (572.3/mi²). The racial makeup of the CDP was 96.81% White, 0.95% African American, 0.35% Native American, 0.92% Asian, 0.03% Pacific Islander, 0.03% from other races, and 0.92% from two or more races. Hispanic or Latino of any race were 1.01% of the population.
There were 1,347 households out of which 32.0% had children under the age of 18 living with them, 49.1% were married couples living together, 10.2% had a female householder with no husband present, and 37.3% were non-families. 29.0% of all households were made up of individuals and 8.0% had someone living alone who was 65 years of age or older. The average household size was 2.35 and the average family size was 2.92.
In the CDP the population was spread out with 23.4% under the age of 18, 6.6% from 18 to 24, 35.1% from 25 to 44, 25.1% from 45 to 64, and 9.8% who were 65 years of age or older. The median age was 38 years. For every 100 females there were 102.9 males. For every 100 females age 18 and over, there were 100.4 males.
The median income for a household in the CDP was $58,325, and the median income for a family was $71,667. Males had a median income of $51,440 versus $37,891 for females. The per capita income for the CDP was $28,317. About 3.2% of families and 5.1% of the population were below the poverty line, including 4.1% of those under age 18 and 11.8% of those age 65 or over.