Daliao Township was only established in 1946; it was subordinate to the lower Danshuei River in Fongshan during the Cing Dynasty. Due to its fertile soil, people gradually moved here to develop the land and they built huts (Liao) with sugar cane, namely: Cibu Liao, Chaojhou Liao, Dingda Liao and Diada Liao. Later the four Liaos were amalgamated to form Daliao. The old name of Ciliao Village was Cibuliaozai, which is an old name still used by many people of the older generation today. According to information, the name may have also been derived from the fact that many people have constructed huts to raise ducks at the Cibu area.
The first and second neighborhood in Jhongjhuang Village were mainly involved in blacksmithing. Currently only a few people still depend on blacksmithing for their livelihood. The Fangcuo in third and fourth neighborhood are named after the Fang families that live there. Yihe Village near the Fongsiang Bridge is also called Jhuanzaiyao (brick kiln) due to the large number of brick factories there.