The history of Oakham is rooted in the Anglo-Saxon period. According to one theory, the town's name derives from an Old English phrase meaning "Occa's Ham" (Occa's homestead), or it may be related to the abundance of oak groves in the area. The first and most significant documentary evidence of the settlement's existence is found in the famous Domesday Book of 1086. It describes Oakham as a wealthy royal manor that previously belonged to Queen Edith, wife of Edward the Confessor.
Oakham's transformation into the important administrative centre of the county of Rutland was driven by several key factors:
- Construction of the Castle: In the late 12th century, the Norman baron Walkelin de Ferrers erected the famous Great Hall of Oakham Castle. This magnificent structure, which has survived to this day, cemented the town's status as the region's centre of political power.
- Geographical Location: The town is advantageously situated in the fertile Vale of Catmose, making it a natural focal point for surrounding landowners and traders.
- Trade Privileges: In 1249, King Henry III officially granted Oakham the right to hold markets and fairs, providing a powerful impetus for economic development and population growth.
From its early years, Oakham's economy was based on agriculture, particularly the trade in wool and livestock products. The town quickly became a prosperous market centre, evidenced by the preserved ancient Butter Cross, under the arches of which local farmers traditionally sold butter and cheese.
A unique cultural feature of the town is an unusual tradition originating in the Middle Ages: every Peer of the Realm visiting Oakham for the first time is obliged to present a horseshoe to the Lord of the Manor. This custom, likely linked to the family name de Ferrers (from the word "farrier" — blacksmith), has turned the castle into a unique gallery displaying hundreds of horseshoes from various eras and sizes.