Oxford Township was formed from portions of Greenwich Township on May 30, 1754 while the area was still part of Sussex County and was incorporated as one of New Jersey's initial group of townships by an Act of the New Jersey Legislature on February 21, 1798. Mansfield Township became part of the newly formed Warren County on November 20, 1824. Over the centuries since its creation, portions of the township were taken to form Knowlton Township (February 23, 1763), Franklin Township, Harmony Township and Hope Township (all on April 8, 1839), Belvidere (April 7, 1845) and White Township (April 9, 1913).

The origin of the name and the exact date of the township's creation is still in dispute. One source says that the township was named after the university in England, and was formed in either 1753 or 1755, but another source claims that the township was named after an early settler named John Axford, who came to settle in the area with others between 1735 and 1739, and affirms that the township's creation was in 1755.