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It was formed on 1 April 1974 as a successor to the borough of Pwllheli, the urban districts of Criccieth and Porthmadog, along with Llŷn Rural District, and part of Gwyrfai Rural District, all previously in the administrative county of Caernarfonshire. It was named after the river Dwyfor.
Dwyfor was notable for being the last stronghold of the Sabbatarian temperance movement in Wales. Under the terms of the Licensing Act 1961, local referendums prevented the opening of public houses on Sundays until 1982, and a further referendum (on a 9% turnout) reimposed Sunday closing between 1989 and 1996.
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