Norsewood is located in the heart of what was once the dense and towering forest known as the Seventy Mile Bush. The town was established in 1872, with the arrival of 372 Norwegians and 11 Swedes aboard the Norwegian ship Høvding, at Napier on 15 September 1872. The same day, the English ship Ballarat also arrived at Napier, its passengers including around 70 Danes. Høvding arrived again at Napier on 1 December 1873, this time with 369 Norwegians - bringing all together 752 immigrants on the two journeys. Most of these people became Norsewood's pioneer settlers. The remainder fulfilled the same role at the bush settlement of Dannevirke, some 22 kilometres away.
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Over the next several years, hundreds of other settlers also found themselves struggling to establish a new life on the many 40-acre bush-covered 'farms' in the vicinity of Norsewood, which - in turn - became the district's main town. These people included many more Norwegians, as well as Swedes, Danes, Germans and Britons. Life for these people was very hard. Promises made by the New Zealand Government, the Hawkes Bay Provincial Government, and their agents, were not always kept. Poverty was well known in the district, as were natural calamities such as the Great Flood of 1880 that isolated the district for a few days, and the major fire of 1888, that destroyed much of Norsewood and left around 170 people homeless.
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The New Zealand Government had promised to employ these immigrants on various Public Works, such as building roads and railways through the district. However, things did not always go according to plan - especially when the country descended into economic depression around 1880. Also, when the long awaited railway eventually opened at the point nearest the town in August 1880, it had bypassed Norsewood and passed through the town of Ormondville, which is six kilometres away. Thus Ormondville's status rose, while Norsewood's status declined somewhat.
Norsewood's situation on State Highway 2 brought the town to predominance again with the rise in car use. The re-alignment of the highway in 1966 divided Norsewood into the "Upper" and "Lower" halves. Now travellers only see signs and the bridge joining the two halves as they travel on the highway.