Tecumseh began in 1856 as a townsite called "Frances," renamed Tecumseh after the Shawnee chief shortly afterward, and was made Johnson County's seat by the Nebraska Territorial Legislature in February 1857. The origin of "Frances" is murky — long attributed to a wife of Richard M. Johnson, though some historians think it may honor Francis Burt, the Nebraska Territory's first governor. As the county seat, Tecumseh grew into the county's commercial and governmental center on land now covering about 1.5 square miles.

Tecumseh's population has held essentially flat for two decades — 1,716 (2000), 1,677 (2010), 1,694 (2020 Census) — making it by far the county's largest town. It is a city of the second class, ZIP code 68450. About two miles north of town sits the Tecumseh State Correctional Institution, a medium/maximum-security state prison and significant regional employer. The town was a filming location for the 1987 TV miniseries "Amerika," and notable people connected to Tecumseh include federal judge Peirson M. Hall, Fortune magazine editor Walter Kiechel III, and football player/actor Tony Davis.