Rhayader was the site of a number of Bronze Age settlements, and has yielded a number of archaeological finds, including Neolithic axes and a collection of gold jewellery believed to have belonged to the Anglo-Saxon princess, Morwena. In more recent times, a Rhayader Castle (NPRN 94001) is believed to have been built in 1177 by Rhys ab Gruffudd in an attempt to stop the spread of Norman influence in the region. Tax records indicate that the borough originates from the mid-fourteenth century. By 1360 Rhayader had market town status, with weekly markets and an annual fair.
The town has a distinctive cross plan of four streets, North, South, East and West, and was famed for the waterfall for which it was named. This feature was destroyed in 1780 to make way for the bridge (NPRN 24281). The eighteenth and nineteenth centuries witnessed the development of the town, with the Town and Market Hall (NPRN 32146) completed in 1762, the railway line (NPRN 96559) in 1864, and work beginning on the Elan Valley Dam (NPRN 96459) in 1894, opened in 1904. The completed reservoir changed the face of the town and brought a considerable tourist trade.

Source: Beresford 'New Towns of the Middle Ages' revised edition (1988), 573-4

K Steele, RCAHMW, 16 January 2009