Whitewood derived its name from the birch and aspen trees found near the town.
The City of Whitewood was originally the orchard of the Capt. Knight range, owned by William Selbie, one of the early settlers of the Black Hills.In 1887 the Pioneer Town-site company along with the Chicago Northwestern Railroad company purchased the land for William Selbie. The town was platted and lots were sold at public action, commencing on Thanksgiving day 1887.