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Hammel first saw significant settlement in the 13th century.<ref name=":0">{{Cite web|last=Larsen|first=Christian|date=1 November 2019|title=Hammels Historie|url=https://trap.lex.dk/Hammels_historie|access-date=12 March 2024|website=Trap Danmark|language=da}}</ref> The town was recorded as "Hamel" in 1479 and "Hammell" in 1596. The etymology of the town's name is believed to derive from the [[old Danish]] term "hamal", meaning "hill".<ref name=":1">{{Cite web|last=Stelzner|first=Knud|date=24 May 2017|title=Hammel|url=https://denstoredanske.lex.dk/Hammel|access-date=12 March 2024|website=[[Den Store Danske]]|language=da}}</ref><ref>{{Cite web|date=1 November 2019|title=Hammel|url=https://trap.lex.dk/Hammel|access-date=12 March 2024|website=Trap Danmark|language=da}}</ref>
By 1902, the town had a population of over 1,200. That year, Hammel station was designed by architect [[Heinrich Wenck]] and opened as the terminus of the Hammel-Aarhus Railway.<ref name=":0" /> The rail line was extended in 1914 to Thorsø, though the number of passengers traveling from Thorsø to Hammel was never profitable.<ref name=":1" /> Nevertheless, the railway connection in Hammel turned it into a [[railway town]], and its population expanded.<ref name=":0" /> By 1916 Hammel had a population of 1,513, and by 1955 had 2,282.<ref>Folketællingen 1916, p. 69.</ref><ref>Folketællingen 1955, p. 14.</ref> The entire railway line
[[File:HammelØstergade.jpg|thumb|Østergade, 2016.]]
For much of its history, Hammel was a [[Parish (Denmark)|parish]] within the jurisdiction of Gjern [[Hundred (county division)|Herred]]. Following the [[1970 Danish Municipal Reform]] the town beceame the seat of [[Hammel Municipality]]. The municipality was dissolved in the [[Municipalities of Denmark#Municipal reform of 2007|municipal reform of 2007]], and today Hammel lies with [[Favrskov Municipality]].<ref name=":0" />
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