Fort Croghan was the third of the first four forts established by the United States government in the first quarter of 1849 to protect settlements from hostile Indians. Ultimately there was a chain of forts extending from Fort Worth in North Texas to Fort Inge near present Uvalde. It was officially established on March 18, 1849 by Company A, U. S. Second Dragoons, under the command of Lt. C. H. Tyler. It is noted that such men as Major Albert Sidney Johnston (paymaster at the Fort), H. H. Sibley, George Pickett, (later Confederate Generals), and Captain Arthur T. Lee were, at different times, in command at Fort Croghan.
The buildings, including the hospital, officers' quarters, enlisted men's huts, commissary, adjutant's office, bakery and horse and mule lots with storage buildings, were all erected by the soldiers. In October 1849, Company C, 8th Infantry, U.S.A. (mounted) arrived to join in manning the fort. As soon as the fort was established, a town was begun on the east bank of Hamilton Creek and named "Hamilton" or as sometimes called, "Hamilton Valley." In 1852, the Legislature authorized the creation of Burnet County named in honor of David G. Burnet, first President of the Republic of Texas.
In the latter part of 1852, a second line of forts located to the west was begun. The first line was abandoned and the men were moved to the second line. Fort Croghan was finally abandoned in December 1853. The name of the town was changed to "Burnet" to correspond with the name of the county in 1858.