Before European settlement the Traverse City area was part of the territory of the Council of Three Fires, the Odawa, Ojibwe and Potawatomi. The Odawa, the most numerous there, called it Kitchiwikwedongsing, often shortened to Wequetong, "place at the head of the great bay," and it was the northern end of the Old Indian Trail used by the Hopewell and later the Anishinaabe. Grand Traverse Bay was named by 18th-century French voyageurs for la grande traverse, "the long crossing," across its mouth. The area was French and then British territory and passed to the United States under the Treaty of Paris of 1783.
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In 1847 Captain Horace Boardman of Naperville, Illinois, bought land at the mouth of the Boardman River, then the Ottawa River, still home to Native Americans, and he and his son sailed into the river on June 13, 1847, and built a house and sawmill. In 1851 they sold the mill to Hannah, Lay and Company, Perry Hannah, Albert Tracy Lay and James Morgan, whose investment drew settlers, and Hannah is known as the founding father of Traverse City. The area, first part of Omeena County, was reorganized as Grand Traverse County in 1851, with its seat at Boardman's Mills, in today's downtown.
In 1852 Lay obtained a post office for the settlement, known as Grand Traverse City, and a postal clerk suggested dropping "Grand" to avoid confusion with the Grand Traverse office at Old Mission, so it became Traverse City. Around then the first cherry trees were planted on the Old Mission Peninsula, now famous for them, and rail service arrived in December 1872.
Sources
Wikipedia: Traverse City, Michigan