In 1642, Derby was the first inland settlement on the Naugatuck River. From this destination, settlers continued to explore, following the river further north. In the late 1600's a Pequot Indian named Gideon Mauwehu, who lived in the Derby area, gave his son, Joseph, a parcel of land north on the Naugatuck River near the Great Falls. On this land a number of Pequot Indians established their reservation with Joseph as their chief. As the white settlers moved up river into the area of the Falls, they and the Indians worked and lived together as friends.
The area began to grow with more and more settlers moving into the hills of Great Hill on the West side of the river, the Skokorat area on the east side of the river and over onto the "Promised land" area. The fertile green land and forest now were spotted with clearings for farms and grazing cattle. Dirt roads were built to connect outlying settlers with the town and the port of Derby. This small settlement, although still part of Derby, now needed a name of its own. In 1738, to honor Chief Joseph Mauwehu, who had been given the nickname of "Chuse", the settlers called the area Chusetown. Mauwehu soon realized the area was becoming too populated for the Indian way of life, and he and his tribesmen left the area to go to Kent where a larger reservation was located.
As the population continued to grow, small industries began to appear. A valuable natural resource was provided by the Naugatuck River with its natural falls and numerous brooks and tributaries with small waterfalls on them. These provided water power for such industries as grist mills, corn mills, paper mills and blacksmith shops. When the Revolutionary War began, although no battles were fought in this area, the people of Chusetown were proud to enlist and support more than 100 soldiers from this village.