In 1857 the first attempt to settle the area was made by the Waverly Town Company of Plattsmouth which built a house along the west bank of Skull Creek, a half-mile from where Linwood stands today. Later, in 1865, a school was established and in 1868 a postmaster was appointed for the settlement, which at that time was originally named Skull Creek.
Skull Creek was named as such because of the number of human and buffalo skulls that were discovered nearby. It was later determined the area was once an ancient village of the Pawnee tribe.
Eventually it was renamed Linwood for the Linden trees growing near the creek. Linden trees were important to the original setters of the area who were of Slavic origin as a way to mark their ties to the Old Country. Linden trees represent friendship, love and loyalty and continue to live on as a national symbol in Slovenia today.
The Fremont, Elkhorn and Missouri Valley Railroad built a line through the settlement in 1888, when Linwood was officially incorporated into a village. Linwood served as a junction point for branch rail lines going to Superior and Hastings. The rail service continued on until the early 1960s, when the rail lines were abandoned and left Linwood without rail service.
In 1963 a flood devastated the community. Extremely heavy rains fell on the region on the night of June 23 and morning of June 24, causing severe destruction that extended over several eastern Nebraska counties. Residents described the natural disaster as the most severe and widespread flood to strike the area in modern times. At the time of the flood, the population was well over 300 people. After the disaster however, rather than rebuild the people left, most of them moving to Schuyler.
According to the 2000 census, Linwood had a population of 118 people. Today, 88 people reside in the community which is located in Butler County, Nebraska.
The meeting place for the town-folks is Nowhere Special Steakhouse & Saloon. In addition to a taxidermy shop, owned by Gerald Jakub, the town has a community post office, with a new building which opened June 1, 1991. Linwood students, who are part of a Class VI district, attend classes in Schuyler or David City. The village also features a community park.
Residents are proud of their volunteer fire department with several trucks and around 20 firemen. The fire department is always looking for volunteers.
Moses Merrill Camp and Conference Center, located outside the township, offers a faith-based retreat for children and adults alike in the quiet, wooded hills of the rural countryside.