The earliest forms of local government in the Shire were the district road boards established in the 1850s and 1860s. These boards were mainly responsible for the care and maintenance of district roads and bridges.
When Torquay came into existence it was within the Shire of Barrabool’s boundaries. In 1890 with the encouragement of the Torquay Improvement Association (TIA) the Public Works Department adjusted Barrabool’s boundaries making Spring Creek Road the boundary between the two Shires. The change came into effect in October dismissing the objection of South Barwon Shire who believed it was a disadvantage to include the township of Puebla within its boundary.
It was not until 1965 when there was a petition for severance presented to the Governor-In-Council seeking that the greater part of the Connewarre Riding (which included Torquay) of the Shire of South Barwon be removed from that Municipality and place in the Shire of Barrabool. The request was denied.
On 18 May 1993, significant proportions of its land area was annexed to the newly created City of Greater Geelong, despite concerns expressed by Torquay. The Shire of Barrabool, which had been significantly reduced by the creation of Greater Geelong and had lost much of its rates base, joined Torquay residents in suggesting the Kennett Liberal government create a coastal shire, which united Torquay and Anglesea. On 9 March 1994, the City of South Barwon was abolished, and, along with the remainder of the Shire of Barrabool and parts of the Shire of Winchelsea, was merged into the newly created Surf Coast Shire, which established its administrative centre at Torquay.