The area known as Wallacia has seen several name changes over the years. Originally the region was called Riverview, but became known locally as Wallace after Robert Wallace who grazed cattle on the 2000 acres he rented from Sir Charles Nicholson. Because of its central location in the area – between the Nepean River and Bringelly Road – his house became the unofficial Post Office from November 1885. It was situated at the rear of what is now the Wallacia Store and Newsagents. By 1897, a school built in the area was known as Wallace School.

When the Post Office became official in November 1905, the G.P.O. named the area Boondah as the name Wallace was already in use elsewhere in NSW. Local people objected however, as they wished to retain the link with Wallace. To overcome the problem, they suggested that the area be called Wallacia. This name was officially approved on 1 June, 1906.

The region was chiefly one of dairying and grazing during the nineteenth century, but in the early twentieth century – because of its rural atmosphere and proximity to Sydney – tourism developed as people opened their homes as guest houses. After the Second World War however, the increase in car ownership and the availability of air travel saw a decline in the local tourist trade. Today Wallacia’s tourism is centred on the day-tripper trade with the Wallacia Hotel and the Wallacia Golf Course the chief attractions. Growth in the area in the past few years has mainly occurred with the development of hobby farms by people seeking a retreat from city life.