The community was named after Chelsea Demmitt, an early settler and local pioneer who took up land in the area prior to the arrival of major infrastructure. The Post Office opened on November 1, 1929.

Demmitt’s evolution from a loose collection of homesteads into a recognized community was catalyzed by the Northern Alberta Railways (NAR). In 1930, the railway line was pushed through the area as part of an expansion project extending westward toward Dawson Creek, British Columbia.

With the rail siding established, Demmitt grew into a functional rural shipping point. Grain elevators and stockyards were built to handle the region's agricultural output, allowing local farmers to transport their wheat, coarse grains, and livestock to broader markets.