It is believed the name Milford arose from the large number of mills and fords located on the several streams of the township. The area's first settlers, aside from the Indian tribes, were Mennonites who came here around 1712 or earlier from Germany. William Penn sent English and Welsh people to live here and they were later joined by Lutheran and Reformed people from the Palatenate in Germany and Swiss and French Huguenots. The township is comprised of the villages of Brick Tavern, Finland, Geryville, Milford Square, Mumbauersville, Spinnerstown, and Steinsburg. The town of Trumbauerville located in the center of the township is an independent borough and is not now considered to be part of Milford Township.

This town takes its name from the Spinner Family who settled there in 1753. David Spinner (born in 1758) was a potter who practiced the art of sgraffito on redware using the red clay of the area. His house stands across from the Spinnerstown Hotel, formerly known as "The Sign of the Spread Eagle" which was also run by members of the Spinner Family -first David in the 1840's, and later his son Edwin in 1853. The hotel has been owned by the Dale family since 1959 and is a favorite dining spot for many.