The name "Goolwa" means "elbow" in the
Ngarrindjeri language, and the area was known as "The Elbow" to the early settlers. Before 1837 the area was briefly considered for the site of the colony's capital; a
special survey was undertaken in 1839–40, with a sizeable township laid out at
Currency Creek and land for a port with substantial warehousing on the river where Goolwa now stands. A
wharf was constructed in 1852 and government buildings soon followed, including a post office in 1853. However, the treacherous waters of the
Murray Mouth made it difficult for shipping and made the town unsuitable as a major port. Goolwa nevertheless developed as Australia's first inland port (1853).
Australia's first railway was opened in 1854 to connect Goolwa to
Port Elliot. It was later extended to
Victor Harbor, allowing goods to move from river boats to ships, so that neither had to negotiate the Murray Mouth. Goolwa was officially established in 1857. In 1919 the
District Trained Nursing Society sent
Clara Winifred Howie to establish a nursing facility in Goolwa. The spread of railways to inland Australia put an end to the river trade and Goolwa's significance as a port. With the decline of the river trade Goolwa became dependent on local farming and fishing, as well as becoming a popular destination for holidaymakers from Adelaide. In 1935 a permanent
barrage (called the
Goolwa Barrage) was constructed between
Hindmarsh Island and
Sir Richard Peninsula on the south eastern outskirts of Goolwa. The barrage separates the fresh water of the River Murray from the salt water coming up from the River Murray mouth. The barrage was constructed to prevent the salt water traversing further up the River Murray and polluting much needed fresh water. Goolwa had earlier been connected to Hindmarsh Island by a cable ferry; this was replaced in 2001 by the official opening of the
Hindmarsh Island bridge, the construction of which had been a focus of
national controversy during the 1990s. During 2008 and 2009 Goolwa suffered from one of the worst droughts in Australian history and the river which has sustained the town throughout its history was reduced to nothing much more than a channel and mudflats. The crisis prompted ongoing discussions with state and federal governments with the aim of releasing more water from upstream to ensure the survival of the river. In 2009 a temporary
levee (called the Clayton Regulator) was constructed between
Clayton Bay and the north east side of Hindmarsh Island. The Regulator was put in place to protect the Goolwa Channel and its tributaries from the danger of
acid sulfate soils. The low water level was exposing the river bed and scientific evidence warned of the devastating impact of acidification of the Lower Lakes region. The Regulator immediately increased the water level between the Regulator and the Goolwa Barrage. In 2010 increased rainfall and water from upstream allowed the Regulator at Clayton Bay to be substantially removed. The rainfall has replenished much of the river and lower lakes. In late 2010 some gates on the Goolwa Barrage were opened for the first time in many years to allow fresh water to flow to the Murray Mouth. Continued rainfalls combined with flooding upstream in
New South Wales and
Victoria led to massive flows down the River Murray, and by January 2011 all the gates on the Goolwa Barrage were open. ==Location and governance==