The settlement of Thorney has a long history from the time when the island which is now the site of the village centre was in natural fenland.  A low island up to 5 metres above the surrounding fens was settled for agriculture.  Recent archaeological investigations indicate that there has been settlement around Thorney from the Iron Age, Bronze Age and Roman times.  Then legend says that religious people wishing to escape the world asked for permission to move here in 655, and did so in 662.  The place was then known as Ancarig, or the Island of the Hermits.  However, the Danish invaders destroyed the religious settlement in 870.  It is said that the monks of Thorney escaped the attack and helped to bury those of Peterborough.

Thorney was a monastic establishment until 1550.  The fen area was drained in the 17th century.  Agricultural and economic conditions were such that, in 1910, the Russell family sold the estate at Thorney.  The village began a new phase of development in the twentieth century and expanded as new areas of one and two storey houses were developed.  These are now established and well-kept residential areas, among which are some small shops and businesses.  In recent years, more homes have been added, much of it infilling along main roads, together with a variety of larger industrial areas.

During the 20th century, the number of local people employed in agriculture has greatly decreased, and now most of the population live in the village itself rather than the surrounding farmland.  Some agricultural cottages, farmhouses and buildings have been converted for residential use.

Wisbech Road homes build by The Duke of Bedford's estate