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The origins of the historic township of El Dorado date back prior to the 1850s when it was identified as Mud Springs, a watering hole for livestock along the road which connected Sacramento to Hangtown (Placerville). It is said the watering of stock turned the springs into an area of muck and mud, which explains the derivation of the name. When emigrant gold seekers pitched tents around the springs, the 1850 census lists the names of 462 inhabitants. The Post Office was established in 1851.

By 1854 the site reportedly had grown to 2,100 inhabitants, prompting the establishment of a community newspaper by T. A. Springer, the former editor of the Placerville El Dorado Republican. In September of 1854, Mud Springs formed a County Seat Committee and entered a contest to designate "the permanent location" of the county seat. Mud Springs polled between 679 or 685 votes, mostly from Mud Springs and Logtown. The town boosters determined that no matter what other advantages the community might have, the name "Mud Springs" was likely to deter growth and invite ridicule. What better name change than to that of the county, a name that meant "Gold" or "The Gilded One."  The Coloma newspaper, the Empire County Argus April 21, 1855 edition, announced the incorporation and name change to "El Dorado." The historic township is registered as California Historical landmark #486.

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