Pottsboro was established by pioneer settler James A. Potts who had donated the land for the town in 1876 and a right-of-way for the Missouri, Kansas, and Texas for an extension of tracks from Denison to his settlement. Incorporated in 1880 with the name "Pottsborough". Judge James G. Thompson, the father-in-law of J.A. Potts, applied for a post office in 1891, when they responded, the "ugh" was dropped from the name by the federal government and the town's name finally became “Pottsboro”. Pottsboro has a total area of 2.9 square miles and is situated on Farm Road 120 eight miles northwest of Sherman in north-central Grayson County, Texas. Texas State Highway 289 passes through the west side of the town, leading south 10 miles (16 km) to Southmayd and north 10 miles to a dead-end at Preston on Lake Texoma. Denison is 8 miles (13 km) east of Pottsboro via Farm Road 120, and Sherman, the county seat, is 12 miles (19 km) to the southeast. It is also part of the Sherman–Denison Metropolitan Statistical Area. Also, the town is served by the Pottsboro Independent School District. The population was 2,351 in 2017. Finally, airports located in Pottsboro include Diamond J Airport (TS85) (Runways: 1), Hitex Private Airport (9TX7) (Runways: 1), and Nuggs Flying M Airport (TE68) (Runways: 1).
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