The town was believed to have been founded when the schooner SS Schomberg was wrecked in the middle of the 19th century, though the town was not sufficiently populated to justify a Post Office until 10 April 1890. It has since become a fishing village, and at the 2006 census, Peterborough had a population of 178. The town has two public tennis courts and beaches, and a nine hole golf course at the Peterborough Golf Club on Schomberg Road.
The town is situated near The Twelve Apostles, and London Arch land formations; and is part of the Shipwreck Coast. Many ships have been wrecked in the vicinity, due to limestone cliffs eroding away and leaving many patches of harder rock concealed just under the waves quite a distance out to sea, and this erosion is ongoing, evidenced by the London Bridge formation collapsing in the early 1990s to form London Arch. One of the most famous wrecks was the Falls of Halladale which was wrecked in 1908 in thick fog, and became a tourist attraction for the next few years as it remained on the reef it was stuck on.