The Township of Muskoka Lakes amalgamated in January 1971 and is made up of several former townships counting the Township of Cardwell, the Township of Watt, the United Townships of Medora and Wood, the Town of Bala, the Village of Port Carling, the Village of Windermere and a portion of the former Township of Monck.

The Townships were opened for settlement following the passage of the Free Grants and Homesteads Act in 1868. Prior to this, officials advised turning all of Muskoka into a Native Reserve. The desire for land, coupled with the district's rich timber resources, enforced the government to reconsider.
On February 8, 1870, the Corporation of the United Townships of Watt, Cardwell, Humphrey, Christie, Medora and Wood was assembled. Later, the individual townships became municipalities in their own right.

The Townships of Watt, Cardwell, Medora and Wood, portions of Monck Township, the Villages of Windermere and Port Carling and the Town of Bala amalgamated in January 1971 to form the Township of Muskoka Lakes. The municipal office is situated in Port Carling.