Greenwood was a small hamlet south of the Dominion Atlantic Railway's Kingston Station. In 1942, the Royal Air Force established RAF Station Greenwood and built an aerodrome on nearby farmland to provide a facility for training aircrew under the British Commonwealth Air Training Plan. The Royal Canadian Air Force took over the facility in 1944, renaming it RCAF Station Greenwood.
Today, the village and base's combined population numbers approximately 11,000. The village hosts numerous services and is also the location of the Greenwood Mall, the largest shopping centre in the western part of the Annapolis Valley.