A vivid impression of the original landscape has been left by a local mill manager's daughter who wrote: 'From Wollongong to Jamberoo, the road was a mere day track through a forest of tropical foliage; gum trees 200 [feet] or more in height, gigantic india-rubber trees with broad shining green leaves, lofty cabbage palms, and many other kinds of tree towered above us, so that their tops made a twilight canopy, unpenetrable to the sunlight, save for an infrequent clearing in the forest made by the settler's axe. Huge lianas, some as thick as a man's arm, hung down snakelike from the trees.'
The area's original inhabitants, the Wodi Wodi Aborigines, are said to have called the place 'Kiarama-a' or 'Kiar-mai'. The meaning is usually given as 'where the sea makes a noise', although 'fertile area', 'mysterious spirit' and 'plenty food: good fishing ground' have also been suggested.
The former is a reference to the blowhole, allegedly known as 'Khanterintee' (meaning 'mysterious noise') by the local Aborigines. The first European to sight the blowhole was George Bass who wrote of the 'tremendous noise' this 'subterraneous passage' produced when he anchored offshore in December, 1797.
An abundance of cedar drew the first Europeans to the area. The population of Sydney required softwood for its furnishings and, by 1815, timber was being shipped out from Kiama's main beach, Black Beach. By the 1820s Kiama was supplying nine-tenths of the Sydney cedar market.
In 1819 surveyor James Meehan surveyed the district by land and surveyor-general Oxley explored the area, which he called 'Kiarami'. Seven years later he reserved the land adjacent the harbour for the development of a township and surveys were carried out in 1830 and 1831, the year that troopers were sent from Wollongong to set up camp and preserve order among the cedar-getters.
One sawyer, David Smith, appears to have been the first to take up permanent residence in 1821. He built a permanent house in 1832 which became the village's first tavern, the Gum Tree Inn, in 1837. The town was gazetted in 1839.
Kiama developed as a shipping and service centre for the local industries. In the 1840s mooring chains were affixed to the rocks on either side of Black Beach to provide secure moorings. The iron post that functioned as an anchor pin for the securing chain is Kiama's oldest surviving historic artefact. It can be seen, still driven into the rocks with some chain remnants, from the concrete walkway on the north-western side of the harbour.
A postal service commenced in 1841 and dairying, soon to become a staple industry of the region, was established the following year. Butter was shipped directly to England in 1880 and Australia's first butter co-operative opened in 1884.
The first church (Anglican) was built in 1843 and the first local school commenced operation within the building later that year. A jetty was erected to facilitate export trade in 1849. Two years later the population was recorded as being 199.
The first public school opened in 1861, and, two years later, the Kiama Independent was founded. Published by one family throughout its history it is now the oldest surviving family-owned newspaper in NSW.
The development of the harbour, which was completed in 1876, was one of the factors that contributed to the development of the basalt-quarrying industry in Kiama, which would prove economically vital to the town. The first quarry was established in 1855 where the Aquatic Centre is now situated, in Havilah Place. The gravel was transported to Black Beach by horse and dray where, before the wharf was constructed, it was floated out to waiting ships by barge.
The other factor producing a boom was the growth of Sydney's tramways, roadways and railways from 1879, basalt being laid between the tracks. In 1880 two quarries opened at Bombo. A special 'stone fleet' was transporting 400 tonnes of rock a day in 1883. At times there were as many as six ships waiting for supplies.
The railway from Sydney arrived at Bombo in 1887, being extended to Kiama in 1893. It expanded the market for local basalt and, with its greater speed, local butter and milk.
A tramline was built to transport basalt from Bombo to the harbour in 1880 but was unworkable. A new and successful line was laid in 1914 and operated until 1961. One of the original trams can now be found at the Illawarra Light Railway Museum in Albion Park Rail.
Another input into the local economy came from Sydneysiders who were drawn by the ocean views, local scenery and mild climate as early as the 1880s. The establishment of a direct link to Sydney, the improvement of the roads, and the additions of boating and surfing greatly enhanced Kiama's attractiveness as a tourist destination. With butter, basalt, a rail link and tourism the future of Kiama was guaranteed. The period between the wars drew many vacationers from the Riverina and Canberra, and Kiama has become something of a retirement centre since 1945. Thus the population has swollen from 2250 in 1947 to 10280 at last count.
In recent years, due to the excellent freeway system from Sydney, it has become popular with daytrippers and holiday makers.
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