The Village of Potter was established as the railroad progressing westward. The town was named after General Joseph S. Potter, a Union Pacific Railroad Director. In 1870, Union Pacific built a station house and it served as the post office, the schoolhouse and the land development office. It was the only building build for several years. Progress towards advancement began in 1885, when a hotel was built and shortly after stores began popping up, a newspaper called the Potter Review was created, and a church was built. In 1892 due to a big crop, grain bins were built to hold the oats and wheat the local farmers were growing.

After years of drought and hard times, things began to look up for the community in 1904 when the Kinkaid Amendment was passed. The Kinkaid Amendment was part of the Homestead Act of 1862, and granted a full section (640 acres) to new homesteaders settling in 37 counties in western Nebraska. After the amendment was passed, in 1907 the first bank was organized, and many improvements were done to the community such as installing sidewalks and developing water and electrical systems. During this time the town was incorporated, and by 1915, the town's brick schoolhouse had been built.

During the 1920's the town prospered, a library and a power plant with a second generating unit were built, and a volunteer fire department was formed. In 1929, the Lincoln Highway was built and the original route was through town down Front Street. The route was change to a by-pass on the south side of the tracks to keep noise and traffic through town down.

The community's first Potter Days was held in 1936, and the first prize drawing was a brand new Chevrolet. The tradition of Potter Days continues today, and is held annually over Labor Day weekend. There is a parade, drawings, contests, exhibits and a dance or two.

The Village of Potter is still going strong today and progressing towards the future. Over the years, volunteers have done a lot and continue to do a lot to keep are community alive in the changing times. The residents of Potter take great pride in their community and it shows in many of the projects that have been accomplished over the years.