Fredrick Post's son-in-law, Charles Wesley Wood, gave the town its first name of Westwood. In 1881 when the postmaster applied for a post office, the U.S. Government would not accept the name. M. M. Crowley gave Postmaster Zach Lewis a list of potential names. Lewis chose Rathdrum, which was Crowley's native home in Ireland. In 1881 Rathdrum became the first organized county seat of Kootenai County and remained so until the county seat was moved to Coeur d'Alene in 1908.

Mining District

Rathdrum was a supply and jumping-off point for the Coeur d'Alene Mining District. Miners would leave the Northern Pacific train at Rathdrum, take a stage to Coeur d'Alene and then a steamboat up the Coeur d'Alene River to the Old Mission, continuing on the Mullan Road to the mines. In 1886 D. C. Corbin built a branch line from the Northern Pacific main line at the Hauser Junction to Coeur d'Alene, lessening Rathdrum's importance as a supply point.

Fires in Rathdrum

In October 1884, a fire consumed 55 buildings and six city blocks, destroying the business district. Losses were reported at $85,000 with only one business carrying insurance. The town was soon rebuilt, but on August 29 and 30, 1924, another fire broke out. The water reservoirs were undergoing repairs at the time, and were nearly empty. Half an hour after the fire was discovered, it was out of control, and ultimately leveled two solid blocks, destroying 30 stores and residences in the business section. Several of the buildings date from the town's establishment and when it prospered as the county seat. Many downtown buildings reflect the effects of the disastrous fire of 1924.