Terang began as a simple slab hut erected on the eastern edge of Lake Terang in 1840 by Donald McNicol, an employee of Neil Black of the nearby Glenormiston run. The settlement which followed became the town of Terang. The first European settlers found abundant fish, bird and animal life at the lake. Lake Terang disapeared over time but was and was finally drained and is now partly a golfcourse and polo field, complete with encircling 4.8km walking track.
Terang grew slowly, dependant on the fortunes of the grazing country it served. Wheeled traffic only achieved a service to Geelong and Melbourne when the Stoney Rises were penetrated by a proper road. Sumper & Co and Cobb & Co provided daily horse-drawn transport to Geelong from the 1870's, a journey of 13 hours.
By 1887 the railway from Melbourne had arrived, connecting through to Warrnambool 2 years later. The original station was completed in 1889, and 14 years later train patrons were reputed to favour Bowman's Hotel, newly-built across the road.
Terang boasts a large nuber of notable historic homesteads, however most are privately owned such as Keayang or Noogee homestead.
Princes Highway passes through Terang along a broad, oak-lined green boulevard landmarked at the Melbourne end by the distinctive Post Office and clock tower built in 1902. At the western end of High Street stands impressive Gothic-style Thomson Memorial church, built in 1894 and modelled on Scots Church in Melbourne.
Nearby, Noorat is the birthplace of author Alan Marshall of 'I can jump puddles' fame, which recounts his childhood in the town. Mount Noorat is Australia’s largest dry volcanic crater, and this perfect crater is unique in the southern hemisphere.
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