Edinburgh was the first settlement in Johnson County and is situated in the far southeast corner of the county. Edinburgh’s first settler was John Campbell who came into the area in 1820.

The original plat of Edinburgh in 1822 contained 32 lots and was owned by Alexander Thompson and Lewis Bishop.

It is not certain where Edinburgh got its name. Some early accounts say Alexander Thompson was a Scotsman by birth and the town was named in honor of his native land, Edinburgh, Scotland. However, other documents suggest Thompson was born in Virginia and was of Scotch-Irish descent. In another account, Edinburgh was described by the early settlers as “Eden” because of its beauty. The naming of Edinburgh remains unsure.

The name originally ended in "h" when it was first platted and when the town was incorporated in 1853. The "h" was dropped from the name in 1899 and was missing for the next 77 years. In 1977 the Town Council restored the "h" to Edinburgh's name.