Banbury is a significant commercial and retail centre for the surrounding area of north Oxfordshire and southern parts of Warwickshire and Northamptonshire which are predominantly rural. Banbury's main industries are car components, electrical goods, plastics, food processing, and printing. Banbury is home to the world's largest coffee-processing facility (Jacobs Douwe Egberts), built in 1964. The town is famed for Banbury cakes – similar to Eccles cakes but oval in shape.
The name Banbury derives from "Banna", a Saxon chieftain said to have built a stockade there in the 6th century (or Ban(n)a possibly a byname meaning 'felon', 'murderer'), and "burgh" meaning settlement. The Saxon spelling was Banesbyrig. The name appears as "Banesberie" in Domesday Book. Another known spelling was 'Banesebury' in Medieval times.
During excavations for the construction of an office building in Hennef Way in 2002, the remains of a British Iron Age settlement with circular buildings dating back to 200 BC were found. The site contained around 150 pieces of pottery and stone. Later there was a Roman villa at nearby Wykham Park.
The area was settled by the Saxons around the late 5th century. In about 556 Banbury was the scene of a battle between the local Anglo-Saxons of Cynric and Ceawlin, and the local Romano-British. It was a local centre for Anglo-Saxon settlement by the mid-6th century. Banbury developed in the Anglo-Saxon period under Danish influence, starting in the late 6th century. It was assessed at 50 hides in the Domesday survey and was then held by the Bishop of Lincoln.
The Saxons built Banbury on the west bank of the River Cherwell. On the opposite bank they built Grimsbury, which was part of Northamptonshire but was incorporated into Banbury in 1889. Neithrop was one of the oldest areas in Banbury, having first been recorded as a hamlet in the 13th century. It was formally incorporated into the borough of Banbury in 1889.