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The townsite of Popanyinning is located in the great southern agricultural region, 174 kilometres southeast of Perth and 17 kilometres south southeast of Pingelly. The townsite is located on the Great Southern Railway, a private railway built by the Western Australian Land Company and opened in 1889. Popanyinning was one of the original sidings on the rail line when it opened. In 1896 the Western Australian government purchased the rail line and land, and in 1903 decided to have a few lots surveyed at the Popanyinning siding to meet the requirements of the local settlers. After survey the townsite of Popanyinning was gazetted in 1904.
Popanyinning is an Aboriginal name, first recorded by the surveyor John Forrest in 1869, for a pool in the Hotham River. Some records spell the place Popanying, or Popanyining, but these appear to just be misspellings of the original name. The meaning of Popanyinning is not known.