Thomas County's early development can be tied directly to the westward advancement of the railroad. As a result, the county's early history dates back only to the 1880s.

The first homestead claim in this area was filed in 1880. It would be seven years later before the Nebraska Legislature would create the county's boundaries and name the area after Civil War Gen. George H. Thomas.

Prior to the county being organized, this area in the heart of the Nebraska Sandhills was primarily open range pasture land used by cattlemen who brought their herds north from Texas to sell to the government. The government used the beef to feed the Indian reservations in South Dakota.

But it was the railroad which played the most prominent role in the county's development as it followed the Loup River. By the mid to late 1880s the Chicago, Burlington and Quincy line stretched from the county's east to west boundaries. Along the route the railroad designated five stations: Norway, Natick, Halsey, Thedford and Seneca. The latter three eventually became the county's only settlements.

Thedford was designated as the county seat when the county was organized. In 1887, the year the railroad line reached the settlement, a post office opened. About the same time the county's first courthouse was built. It would be replaced in 1922 by the present courthouse.

Passage of the Kinkaid Act in 1904 had a big impact on Thomas County. In the 1890 census, only 517 residents were reported. With the Kinkaid Act many new settlers came to the area in hopes of farming the 640 acres of land they received. The county's all-time high population of 1,773 residents was recorded in 1920. But since the region was not conducive to farming, many of these "Kinkaiders" left the area by 1930. Those who remained bought the abandoned homesteads and created large ranches. In 1940, 14 ranches were said to contain nearly 3,500 acres each.

In addition to large cattle ranches, Thomas County is also home to the Nebraska National Forest located between the Loup and Dismal Rivers.