The name Morawa is an Indigenous Australian name; it probably derives from the Morowar, the local dialect’s word for the dalgite. The name was first used on maps of the area in 1910, in reference to a rock hole. When the railway was being planned in 1913, it was decided to locate a siding at the location, and the name Morawa was chosen for it. The Lands Department then decided to establish a townside there, and Morawa was gazetted in September 1913. In 1921 the Railways Department decided that Morawa was too similar to Mullewa and requested a name change. In response, the town’s name was changed to Merkanooka in January 1922. However the Railway Department, which had pressed for the name change in the first place, did not rename the siding, and in June the town’s name reverted to Morawa at the request of the townspeople.
Most of the farmland around Morawa was given to returned servicemen after the First World War under the provisions of the Discharged Soldiers Settlement Acts which spurred the growth of the town.
Population growth in Morawa has been fairly stable since the 1990s, without much increase, possibly due to more people, young people, moving out to the Perth metropolitan area. Farms had been amalgamating for a number of years for economic reasons and the larger farms required fewer staff.
Like much of the Wheatbelt area of Western Australia, the town is in a period of drought.