Local opinion is divided on the origin of the name. Most agree that the hamlet was named after the Battle of Waterloo. However, some say it was named Waterloo because it was settled by soldiers returning from the battle, while others assert that it was given the name because the hamlet was built for the widows of the soldiers who did not return from the battle.
Just outside of Waterloo there are two standing stones known as the Staredam standing stones. The stone on the right-hand side (if you are facing the stones from the road) has a cross carved in it and is suggested to be one of the earliest examples of Christian symbology being carved on pre-historic standing stones.