Carolina is named after Magdalena Carolina Smit who was the wife of Cornelius Coetzee who established a settlement there in the 1880's. The town was formerly proclaimed on 15th June 1886. During the second Anglo-Boer war the town was flattened. Even the beautiful Dutch Reformed Church building was badly damaged and had to be rebuilt.
The Carolina area supports various types of farming incuding beef, dairy, timber and sheep. Coal, precious stones and other minerals are mined on a small scale.
The surrounding grasslands offer opportunities for hiking and bird-watching. The hot springs at Badplaas are 50 km away and are well-worth a visit.