The Heart of Kaua'i

In ancient times, Lihue was a minor village. Līhuʻe means "cold chill" in the Hawaiian language.

Lihue is in the ancient district of Puna, the southeastern coast of the island, and land division (ahupuaʻa) of Kalapaki. Royal Governor Kaikioʻewa officially made it his governing seat in 1837, moving it from Waimea; he gave the town its name after the land he owned on Oahu by the same name.
By 1880, Lihu`e was consider the most important town on the island; in 1888 it boasted several stores, two schools and a livery stable. Two years later enough travelers passed through the area to justify the establishment of a full—fledged hotel on the main road between the village and Nawiliwili.
Given its central location and commercial vitality, Lihu`e Town was an obvious choice in 1905 to be selected as the island’s county seat, and by the end of the decade Government officials had determined the need to construct an imposing new county building to house government affairs 1n the center of town. In 1912 the County bought a five acre tract of land from Lihue Plantation along the main road to Nawiliwili, now named Rice Street but then listed generically on most maps as "government road" and colloquially called the main street.
In the 1920s and 1930s, Lihue Plantation concentrated commercial enterprises along now Kuhio Highway. The telephone the road running north of Lihue Store and Tip Top, eatery, dentist, insurance company, automobile dealerships, soda-making firm, newspaper, insurance agency, and other establishments set up shop in what became the town’s central business district, though workers’ houses would intermingle with commercial buildings in this neighborhood for many years.
In 1968 the Kaua’i County Charter was adopted into law.

Excerpt from Līhuʻe, by Pat Griffin