During the late 1800s Arcadia was the county seat of what would become many counties. In 1921 legislation enacted called for Arcadia to remain the county seat of Desoto County and resulted in the creation of present day counties of Charlotte, Hardee, Glades and Highlands. Prior to this break up Arcadia's population had grown considerably with over 1,000 permanent residents and boasted 3,000 square miles (7,800 km2) for ranching. During Thanksgiving Day in 1905 the town was destroyed by a large-scale fire that originated from a mid-town livery stable. Furthermore the fire was exacerbated because the town did not have a working water system or fire department. The estimated monetary damage was $250,000 but there was no loss of life. Much of the business district was not spared. It would be years before the town recovered.

 
Presbyterian Church pictured in this 1907 postcardFrom 1917 to 1922, Arcadia was the home of Carlstrom Field, a grass airfield of the U.S. Army Air Service named for deceased aviation pioneer Victor Carlstrom. Carlstrom Field was used for pilot training both during and after World War I. In May 1941 the site again became an airfield for military primary flight training, operated by the Embry-Riddle Aeronautical Institute (now Embry-Riddle Aeronautical University). Carlstrom Field, one of several satellite fields in the Fort Myers Area, also trained pilots for the Royal Air Force until its closing in 1945.