The county was created on May 23, 1857, named for the river in Germantown Township ("cottonwood" is the English meaning of the Dakota Sioux word "Waraju"). Minnesota Governor Horace Austin appointed three county commissioners when the county was established. They met at a home about six miles northwest of Windom on the Des Moines River at Big Bend. During this meeting, they designated the commissioners' districts and changed various county officers. The county organization was completed on July 29, 1870. The first general election was held in the county that November. The first deed of record was filed on January 10, 1870. The first land assessments were made in 1871, and the first taxes were paid in 1872.