The town is named for the Scaggs family, who settled 700 acres (2.8 km2) of farmland in the 1830s and continue to live in the region. The area also used the name "Hells Corner" as a postal address in Civil War times. The historic path running through town was shown on maps as far back as 1795. This path is now named Lime Kiln Road, Scaggsville Road, and Whiskey Bottom Road. In the 19th century, Scaggsville was a stagecoach stop on the trip from Washington, D.C., to Baltimore. Stagecoaches would ford the Patapsco River until a wooden bridge was built in 1859, which washed out in an 1868 flood. Three additional bridges washed out by 1883 before a steel truss bridge was built. In 1941, the Maryland Gazette reported that the town consisted of 15 households. Today, it has grown to a suburban community made up of several neighborhoods.
Some residents have advocated changing the name of Scaggsville to Rocky Gorge, since the community borders the Rocky Gorge Reservoir (also known as the T. Howard Duckett Reservoir) on the Patuxent River. Efforts to change the name, however, have been unsuccessful.