In 1761, Royal Governor Benning Wentworth granted a charter to Caleb Williams and seventy others on the land now known as Clarendon. Each of the seventy was granted 23,600 acres, so that parts of surrounding towns were included in this grant.

In 1768, men from Rhode Island and Connecticut came to clear the land, largely the lands found in the valley of the Otter; among them James Rounds, who was in Clarendon before 1771, and whose son built the first log house in Clarendon Springs, which lies over the mountain high above Otter Valley in the westernpart of town. For the first few years, these pioneers returned to their homes in Rhode Island and Connecticut for the winter months and cleared the land in the summer months. The settlement was first called Durham, but later Clarendon, presumably for the first man who was buried in the town. The first white woman to live in Durham was Mrs. Sprague, who lived to be 104 years of age, and her son Durham was the first white child born there.

By 1790, in the first census, Clarendon had become the largest town in Rutland County with 1478 inhabitants; Pawlet was second, and Rutland only third. In 1940, Clarendon had only about 500 inhabitants.

Clarendon Springs was first visited by Asa Smith who lived in the east part of town. He suffered from cancer and, according to tradition, saw in a dream the health-restoring mineral springs located in the wilderness on the other side of town.

In 1776, he discovered the springs and was restored to health (and a man named Shaw was also cured of cancer by the white clay there). In 1781, George Rounds built a log house near the springs and boarded those who came to the springs in search of a cure.

O.H. Rounds, one of his twelve children, born in this cabin Dec. 5, 1788, became one of the leading men in the town and lived to be ninety years of age.

In 1798, George Rounds built a frame house at the Springs and kept boarders. The medicinal value of the mineral water was officially recognized in 1793 or 1794, and in 1797, there were eight families living there, whose children totaled 113, ninety-nine of them in attendance at the newly formed district school. The names of the heads of the families and number of children are as follows, in each case all the children of one wife:
Child.                                  Pupils
Theophilus Harrington
Betsey Buck 12 11
James Harrington
Polly Bates 12 10
Wm. Harrington
Amy Briggs 17 13
George Rounds
Martha Hopkins 12 12
John Simonds
Sarah Wescott 12 12
Charles Simonds
Mehitable Osburn 16 16
Richard Weaver
Judith Reynolds 13 11
Jonathan Eddy
Temperance Pratt 19 14