During the 1890's, John Maxwell, president of the Central Railway of New Jersey, acquired large tracts of land in what is now the borough, and formed the Garwood Land and Improvement Co. The name "Garwood" which was applied to the settlement some years before incorporation, was in honor of Samuel Garwood, the first president of the land company.

The borough was incorporated on February 25, 1903; prior to this, the town was part of Westfield and Cranford. At that time of her independence, there were only 75 houses with 400 people. Today, there are around 1,300 homes with a population of 4,200 give or take.

At the time of incorporation, Garwood was the Industrial Center of Union County. Hercules Tubeworks, Alcoa, Aeolia Organ and Thatcher Furnace were a few of the main factories. Today it still has a fair amount of industry.

The Fire Department was founded also in 1903. The current 47 volunteer members are trained as professional firefighters. The Police Department was founded in 1908 with members of the Marshal Service. The 10-hour workday pay was $2.50 an hour while 10 hours at night was $3.00. The First Aid volunteer squad was founded in 1939; currently there are 32 members.

The Public Library celebrated its 50th Anniversary in 1983. It has approximately 25,000 titles, and is a source of unique pride.

In 1894 the Post Office was started in a corner of the railroad station with Leonard Cohen as the first Postmaster. In 1910 the volume of business necessitated changing to a building on North Avenue just east of Center Street. Since that time the office moved to the Silberg Building on South Avenue and then to its present location at 202 Center Street. In 1924 free delivery was instituted.