The village was part of the ancient parish of Ruabon and the district was known as Dynhinlle Uchaf (but also known as Y Dref Fechan or Cristionydd Fechan).
The new parish of Penycae was formed 1879, from parts of the existing parishes of Ruabon, Rhosllannerchrugog and Rhosymedre. The parish church of St. Thomas had been consecrated in 1878. However, most of the population of the parish were nonconformists and attended the Baptist chapels of Salem and Sion in Groes; the Calvinistic Methodist chapels in Groes and Tainant; the Wesleyan chapel of Soar in Stryt Issa; or the Primitive Methodist chapel in Copperas.
Most inhabitants find employment outside the village in Wrexham with only a few local shops or public buildings providing jobs.
Dee Valley Water operates two reservoirs in Penycae: Penycae Upper and Penycae Lower.
Wright & Son, ran a bus service from Penycae to Wrexham via Rhos, and later via Ponciau also. When the bus industry was de-regulated in 1986 there was fierce competition between Wright's and the much larger Crosville company. Wrights', the last surviving independent local company, ceased operations in 1993 leaving Crosville as the sole service provider in the Wrexham area.
- Dennis W Gilpin, "Rhosllannerchrugog, Johnstown, Ponciau, Pen-y-cae, a collection of pictures - Volume I" (1991)
- Dennis W Gilpin, "Rhosllannerchrugog, Johnstown, Ponciau, Pen-y-cae, a collection of pictures - Volume II" (1992)
- Colin Gibbs, "Clatter of Clogs" (1990)
- The Church of the Nazarene's Church Website
- St Thomas' Church web site
- Photos of Penycae and surrounding area on Geograph
- Map sources for Penycae