Choctaw was seven miles east of Sherman in eastern Grayson County. The first Anglo-Americans arrived in the area in the mid-1830s, led by Daniel Dugan. Initially the settlement that developed was called Dugan's Chapel. When the Texas and Pacific Railway built through the area, company officials apparently changed the name of the town to Choctaw. A post office operated for one year, 1874–75, then closed and reopened in 1884. In 1892 the town had a population of forty-two and three businesses. Choctaw served as a community center for area farmers. The post office closed again in 1918, and from 1918 to the 1930s the number of residents was estimated at twenty-five or below. Choctaw no longer appeared on county highway maps by the 1940s.
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