Windsor village began development at the end of the 18th century and achieved importance in Vermont history as the location of the framing of the constitution of Vermont. It is known as the birthplace of Vermont, where the state constitution was signed, and acted as the first capital and meeting place of the Vermont General Assembly until 1805 when Montpelier became the official capital.
The village prospered due to its excellent location for industry on the banks of the Connecticut River at the point where several smaller streams run into it. Commerce developed further in the mid-19th century when Windsor became the first town in the state to break ground for the railroad with the construction of a rail depot. Windsor-Mt. Ascutney (Amtrak station) Windsor Station connected town to out of state markets. It was after the railroad went through that a number of prominent individuals from New York and elsewhere began to discover the beauty of Windsor and the Cornish, New Hampshire area. Cornish is connected to Windsor, Vermont by the longest covered bridge in the US.
There were 1,520 households out of which 28.5% had children under the age of 18 living with them, 45.3% were couples living together and joined in either marriage or civil union, 12.2% had a female householder with no husband present, and 37.8% were non-families. 31.8% of all households were made up of individuals and 15.5% had someone living alone who was 65 years of age or older. The average household size was 2.29 and the average family size was 2.83.
In the town the population was spread out with 22.2% under the age of 18, 7.3% from 18 to 24, 26.9% from 25 to 44, 23.0% from 45 to 64, and 20.7% who were 65 years of age or older. The median age was 41 years. For every 100 females there were 91.0 males. For every 100 females age 18 and over, there were 87.6 males.
The median income for a household in the town was $33,815, and the median income for a family was $43,551. Males had a median income of $29,897 versus $23,313 for females. The per capita income for the town was $17,640. About 6.4% of families and 7.7% of the population were below the poverty line, including 5.9% of those under age 18 and 12.3% of those age 65 or over.