Gloucester (map) is a town and local government area in the dairy country of the mid north of the state. Located on the Avon River, just below its junction with the Gloucester River, Gloucester was first visited by Robert Dawson, Chief Agent for the Australian Agricultural Company, circa 1826.

Settlement occurred in the 1830s; the township established in 1855. Although established as a sheep farming district it soon became apparent that the land was not entirely suitable for sheep grazing. The main industries that eventually did take hold were timber, cattle farming and coal. The timber industry has been prevalent in Gloucester since the late 19th century; it and cattle farming are still major industries in and around Gloucester; both dairy and beef cattle.

In 1876 gold was discovered in Copeland, a small town north-west of Gloucester. Along with an abundance of red cedar suitable for felling, Copeland's population surged in excess of 3,000 inhabitants. Today it boats less than 500 individuals.

The Australian Agricultural Company had originally been awarded mineral rights to half a million acres between the Karuah River and the Manning River, which covered the Gloucester district. The company employed surveyors in 1856-7 to undertake a trial survey for a railway between Port Stephens and Stroud, passing through Gloucester to the Manning River. At the time it was felt that with the formidable obstructions from ranges and rivers a line would be impractical and thus construction did not proceed and coal mining was abandoned. However in 1995, Gloucester Coal (originally Stratford Coal) began mining in Stratford, a small town 12km south of Gloucester.

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