Prior to the European settlement of what was then
Van Diemen's Land, the Hagley area was a camping ground for the Port Dalrymple Aboriginal tribe, the area's
native people; Port Dalrymple was an early name for
George Town. It is uncertain if this tribe was a separate group from the aborigines near Port Sorell and the Mersey River. The Port Dalrymple tribe ventured as far as Westbury, but mainly lived and hunted nearer the
Tamar River, William Thomas Lyttleton, William Bryan and Sir Richard Dry were all important figures in the early days of the town. These three owned most of the land of what is now the town and district of Hagley during the 1820s. Sir Richard Dry's father came to Tasmania as an "Irish Exile" with Lt Governor Colonel
William Patterson, founder of Launceston. He spent 13 years as Government Storekeeper at Port Dalrymple. As recognition of his work, on retirement in 1819 he was granted of land. Governor
Lachlan Macquarie granted him the land that marked the foundation of settlement at Hagley. When the elder Dry died, Sir Richard inherited this and other lands in Tasmania totaling over .
Quamby Estate, a property owned by Sir Richard until his death, is east of the town. William Bryan, builder of the first flour mill at
Carrick, was granted at Hagley in March 1825. Bryan also had holdings in Carrick and
Whitemore totaling . Lyttleton died in England in 1839. In disposing his estate, the estate's trustee put all of the lands up for sale. Lyttleton is believed to have
bequeathed the village area to the Hagley residents. The block of land containing the Lyttleton homestead was sold in 1843 to a Dr James Richardson, and the remainder of the land was sold to others in 1848. It was built at the behest of Sir Richard Dry and Archdeacon R. R. Davies, the latter trustee of the Lyttleton estate, on part of the former estate. The land was a gift to the Church of England by Davies in his capacity as a trustee. By 1849, the town's buildings were the Hagley Church of England, an inn—built and run by the East Family opposite the church—and three paling-clad cottages occupied by separate families. and in 1855 a school opened in the Church of England; paid for with funds raised by local residents. That year a postal service began in Hagley. David Parry was appointed
postmaster on 1 July 1855, probably operating an unofficial post office from the Hagley Inn. A
post office officially opened on 10 June 1865, in a building that was demolished in 1970. This building also had a store called the "six day store" run by the postmaster and his wife. In 1857 also the town's first community organisation was formed, the Hagley Ploughing Association, and regular
ploughing matches began. A second church was built, a
Methodist Chapel on the Westbury road, in 1859. and built a brick school and school house. The Glenore school was finished in 1862, and it was accompanied by a farm whose rent was to pay for a teacher and building upkeep. A new church, for the Church of England, was built just outside Hagley. St Mary's Church of Hagley and Quamby was completed and opened in 1862. The first church continued in use as a school until 1865. In the prior year construction had begun on a public school, a two-room building with an adjacent 8-room teacher's residence; the school opened in 1865. By that time it had a number of stores, a blacksmith, a boot maker, a
saddler, a
wheelwright, two churches, two schools, two hotels, a resident
seamstress and a
midwife. By the late 1870s the town had gained, in addition to houses, a police station,
gaol, engineering works, one
steam mill run by the Noake Family In 1941 the Hagley
Flax Mill began operating to process locally grown flax. Hagley was gazetted as a locality in 1968. ==Geography and demographics==