The name CLAY came from the distinguished Kentucky statesman, Henry Clay. Clay County, as a county, was first attached to the west end of Pierce County, but Pierce County in 1855 was located in the southeastern part of Nebraska, bordering the Missouri River. Its north boundary was Weeping Water River, its south boundary was Camp Creek and it extended west 100 miles. In the territorial laws approved February 15, 1864, the north half of Clay County was attached to Lancaster County and the south half to Gage County. By an act of the Legislature of the Territory of Nebraska February 16, 1867, Clay County, was located in its present location.
From the commissioners' proceedings held in Sutton, then the county seat, November 4, 1871, the county was divided into three precincts: School Creek, the east half of the county; Harvard the northwest quarter; and Little Blue, the southwest quarter. On December 2, 1872 it was divided into four precincts of equal size; the northeast quarter named Little Blue; and the southeast quarter Big Sandy. On March 1, 1875 it was again divided into sixteen townships each having 36 sections of land. These precincts are the same as those we know today except that Eldorado was called Lincoln and Inland was called Scott.
Clay County was established February 16, 1867 and was organized under proclamation of action by Governor James September 11, 1871. Governor James ordered an election held at the dwelling of Alexander Campbell - Section 6, Township 7, Range 6. The first election was held October 14, 1871. A full set of County officers were elected. The County seat was located in Sutton.