Tobaccoville was named for a plug chewing tobacco factory owned and operated in the 1870's by Charles Orrender. The factory was located on what is now Doral Drive, one mile south of the present day post office at the Tobaccoville crossroads. This area was the mail route of a 4-horse stagecoach from Mt. Airy to Winston-Salem, which changed horses at Donnaha and forded the Little Yadkin River. When the river water was high, the horses were forced to swim, and the mail was frequently lost. People regularly gathered in the area to watch the stagecoach come and go.

The Orrender Tobacco Factory was the principal landmark in the area, and the name "Tobaccoville" was suggested for the post office. Charles Orrender was commissioned as the first postmaster of Tobaccoville on October 1, 1887. Eight postmasters have since served.When the railroad was built, the post office was moved to be near the railroad, and it became a popular gathering place. People came on Sunday afternoons just to see who got on and off the train. The railroad brought much activity to the community
Tobaccoville - Incorporated 1991
While the possibility of forced annexation by King was a starting point, the Tobaccoville community's desire to maintain its identity and preserve its heritage as a community was the real motivation of the campaign to incorporate in 1990. On July 22, 1990, a Planning Committee was formed to resist the annexation by the adjacent City of King. This would be the first step toward incorporation. Incorporation was seen as the only way to prevent absorption by another municipality and to preserve the integrity of Tobaccoville. On July 27, 1990, an Incorporation Steering Committee was formed. The committee enlisted the support of R. J. Reynolds Tobacco Company who had chosen Tobaccoville as the home of its newest, largest, and most modern cigarette manufacturing facility. RJR wanted to remain part of Tobaccoville and opposed the annexation move as much as the residents of Tobaccoville.A compromise agreement between the City of King, R. J. Reynolds Tobacco Company, and the Tobaccoville Incorporation Steering Committee resolved the controversial issues concerning all parties and insured a fiscal future for the Village of Tobaccoville. RJR agreed to allow annexation by the City of King a narrow strip of land along one third of its property, including the factory's electric power plant. Tobaccoville's boundaries extend through a narrow strip of land along two-thirds of the plant site. Both King and Tobaccoville amended their charters and agreed not to attempt annexation of RJR's Tobaccoville facility for a period of 40 years. The revenue from RJR means the Village Council can operate with a five-cent tax rate.On June 5, 1991, a bill for a referendum on incorporation was passed by the North Carolina General Assembly. Residents in the area of incorporation voted in favor of that incorporation on August 15, 1991. On November 5, 1991, Henry M. Beck was elected the first Mayor of Tobaccoville. Also on that day the first Village Council was elected, consisting of H. Terry Shore, Lena F. Hauser, Kenneth R. Bradstock, and Grover R. Blackburn.

The first census was completed in December, 1991, and the official count was 1,025. Due to several voluntary annexations over the last 13 years, the current population is 2,302.Curbside garbage collection and recycling service began in January, 1992. Initial projects included street lighting, fire hydrants, street paving, and the development of The Village Park.