Though there were settlers in the area in the early 1850s, Fredericksburg didn't come into being until about 1864. There are different theories as to how it was named, including that it was named for Frederick Frevert who operated a sawmill nearby, or that it was named by Confederate supporters after their victory at the Battle of Fredericksburg in Virginia. It may have also been named for Frederick Bruns, a German native who arrived in the 1860s and began farming at the heart of what would become the new community. The Bruns homestead became a station for travelers heading west to California, and also supplied milk and apples to mining towns in the area (and as far away as Virginia City). Other German families also settled in the Fredericksburg vicinity, and at some point a hotel was built. By 1881, however, that hotel site became home to the first schoolhouse. That school lasted until 1930, when a new one was built.

While it has never achieved any prominence, Fredericksburg has remained a small agricultural hamlet for over a century and a half. A brush fire destroyed a few older buildings, including the 1930 school and two barns, in 1986, but most of the original ranches still remain active.