The following was taken from:
The land on which Greencastle now stands was first owned by Samuel Smith, having been issued by the Penn proprietors through a land warrant in 1750. In 1761 the holding was conveyed to John Smith who, in 1762, sold the land to John Davison. William Allison purchased the holding in 1763 and in 1769 he transferred three hundred acres of the tract to his son, Col. John Allison.
John Allison was born December 23, 1738, near Greencastle, where he later received a thorough English and colonial education under the care of a Presbyterian minister. In October 1765 he was appointed one of the Provincial Magistrates for Cumberland County and at a meeting of the Citizens of Cumberland County, held at Carlisle, July the 12th, 1774, he was appointed one of the Committee of-Observation for Cumberland County, becoming quite active in the struggle for Independence. He was a member of the Provincial Conference held at Carpenter's Hall, June 18th, 1776.
He was a Colonel of the Second Battalion of the Cumberland County Associators (Flying Camp) during the Jersey campaign in 1776-1777 and a member of the General Assembly of Pennsylvania in 1778, 1780, 1781. In 1787 Allison was chosen as a Delegate from Franklin County, to the Pennsylvania Convention to ratify the Federal Constitution, and in that Convention he seconded the motion of Thomas McKean to ratify it. In 1788 he was nominated for Congress, but was defeated because he had taken a bold stand for ratification of the Federal Constitution, while his colleagues opposed it. This action made him unpopular with the people and caused his defeat.
He married Elizabeth Wilkin November 3, 1768 and was the father of twelve children. In 1782 he laid out and founded Greencastle. He died June 14th, 1795 and was buried at the Moss Spring graveyard.
Colonel Allison, assisted by James Crawford, a school teacher, laid out the town in 246 lots of equal size. The most authentic reason for giving the name to the town is that it was named for Greencastle, a fishing station in Donegal County of North Ireland. All of the lots were numbered and lottery tickets were sold for eight dollars a piece. Persons who purchased them were entitled to the lot indicated by the number of the ticket and there were no blank tickets. Every ticket buyer was sure to get a lot. However, those near the center of the town, naturally, had greater value than those further from the center.
An early map of Greencastle shows that the two main streets of the town were Baltimore and Carlisle Streets. The Allison plan showed four streets one block in four directions from the center square. There was no Washington Street. It was called East Street. Franklin Street was known as South Street, while Jefferson and Madison Streets were known as West and North Streets.
On September 9, 1784, the State Assembly passed legislation to create Franklin County. Representatives from the Chambersburg area petitioned the Assembly to locate the county seat in their town. However, the people from Greencastle community and others from the southern part of the new county petitioned the law makers to permit an election to decide the location of the county seat. Their petition argued that Greencastle was ideally situated to serve as the seat of justice, and they pointed out that "the town of Greencastle had been laid out about eighteen months, on the crossing of the main road from Fort Pitt to Baltimore, and the Carlisle road leading through Maryland and Virginia, equally as central as Chamber's town; that there are already twenty houses in Greencastle and a number more building; and it is much better situated to draw the trade of the back counties from Maryland which at present goes chiefly to Hagerstown, and is so considerable as to enable more than thirty persons, inhabitants of that place, to carry on business in the commercial line. The command of this trade would, we apprehend, be a considerable advantage, not only to this county, but to the Commonwealth in general." A copy of this petition can be seen at the Besore Library.
The Chambersburg proponents apparently had more influence in the Assembly because no vote was taken and the county seat was fixed, by the Legislature, at Chambersburg.
By 1790 there were about sixty houses in Greencastle, the homes of approximately 400 people. At this time there were three churches; the Red Meeting House of the Presbyterians at Moss Spring, the German Reformed, and the Lutheran.