The history of Franklin Township and the Raritan Valley was largely influenced by the Dutch settlers who came around 1650. They settled in this area by trading and bargaining for land with the Raritan Indians.

No document exists to prove conclusively whether the Township was named for William Franklin, Governor of New Jersey from 1762 to 1776, or Benjamin Franklin. In 2000, the Township Council determined that it was desirable to official espouse a theory as to the naming of the Township. After considering the evidence set forth in Franklin Township, Somerset County, NJ: A History, William B. Brahm, Commissioned by the Franklin Township Library, 1998, Chapter 12, Municipal Government, The Case for William Franklin and The Case for Benjamin Franklin, the Township Council determined to espouse the theory that the Township was named for Benjamin Franklin.

Franklin Township was very much a part of the Revolutionary War History and the scene of many raiding parties along Route 27, then known as the King's Highway. In fact, two British generals, Cornwallis and DeHeister, tried to lure General Washington into battle on the plains of Middlebush and East Millstone. Washington, however, kept his troops at Chimney Rock, just north of Franklin, until the British withdrew. Several of the prosperous Middlebush farms were destroyed by the British soldiers during their retreat. Washington's farewell address was delivered to his army in Little Rocky Hill in 1783.

One of the most important developments for Franklin was the building of the Delaware-Raritan Canal in 1834. Twenty-two miles of this continuous water route from New York to Philadelphia runs through the Township. During the Civil War, up to 200,000 tons of freight were hauled by mule and horse-drawn barges, a great economic boon for the area. The building of the railroads led to the decline of this once successful mode of transportation. Today the canal is the source of drinking water and provides recreation for area residents and visitors to the Delaware and Raritan Canal State Park.