There are two alternative views as to where Crofty derives its name. Whilst some believe it takes its title simply from the fact that the village once possessed many crofts, others are of the opinion that it originates from an early reference to the locale - "y groft wrth y ty" (meaning "the small field near the house").
A settlement of at least a couple of families is believed to have existed here since the 14th century but Crofty only really grew as a true village in the latter half of the 19th century when the land here began to be mined for its numerous veins of coal. The original mining cottages built around this time still exist on the downward slope of hill from Zoar Chapel to the Morlais river and give the village its rural feel, despite the huge sprawl of modern housing estates that have sprung up around it. Mining, now part of Crofty's long history, the village is now chiefly known for being the chief site of the north Gower cockling industry.
At the rear of the new housing estates of Crofty, at the edge of Crofty Industrial Estate, is an interesting man-made feature known as Salthouse Point. Now a relic of its former self, Salthouse Point was an important part of the shipping history of North Gower. During World War II, when the army used the Burry Estuary as a practice range, gun towers and artillery buildings were constructed on the Point. These have only recently been demolished. Now, the stone construction is an important habitat for wildlife. The salthouse that gave this feature its name is believed to have once stood at the end of the point.