Troy was located in 1855 by the county commissioners, who ordered James F. Forman, to lay off 80 acres in town lots. This was done and a public square 300 feet each way was laid out in the center of town. The first house was built by Nelson Rodgers in 1856. The first store was opened in 1857 by Heed & Hampson, the first hotel was opened in that year by John Wilson, and the postoffice was established with Albert Heed, the first lawyer, as postmaster. The city was incorporated in 1860 by a special act of the legislature, which provided that the following men should be judges of election: S. D. Benight, Leonard Smith and John B. Brady.
The election was held in March of that year and the following officers were chosen: Isaac Powers, mayor; William H. Trusdell, clerk. The first court-house was burned in 1867. The next year, after a little county seat war, another court-house was built. Two other fires have occurred in Troy, one in April, 1875, and the other Dec. 22, 1883, the latter destroying $20,000 worth of property. In 1867 a contract was made for completing the St. Joseph & Denver R. R. to Troy, but it was not built till three years later. The first bank was established in 1870 by Henry and Louis Boder. Telephones were installed in 1885. In 1899 there was a fire which destroyed one-third of the business part of town. The St. Joseph fire department came in time to save the other buildings and the residences.
Troy is located at 39°47'17N, 95°5'27W (39.788099, -95.090840). According to the United States Census Bureau, the city has a total area of 1.9 km² (0.7 mi²), all land.
As of the census of 2000, there were 1,054 people, 439 households, and 295 families residing in the city. The population density was 565.2/km² (1,473.4/mi²). There were 474 housing units at an average density of 254.2/km² (662.6/mi²). The racial makeup of the city was 98.77% White, 0.28% African American, 0.28% Native American, 0.09% Asian, 0.09% from other races, and 0.47% from two or more races. Hispanic or Latino of any race were 1.04% of the population.
There were 439 households out of which 31.4% had children under the age of 18 living with them, 54.0% were married couples living together, 8.9% had a female householder with no husband present, and 32.6% were non-families. 30.3% of all households were made up of individuals and 18.7% had someone living alone who was 65 years of age or older. The average household size was 2.38 and the average family size was 2.96.
In the city the population was spread out with 26.2% under the age of 18, 7.4% from 18 to 24, 26.7% from 25 to 44, 20.3% from 45 to 64, and 19.4% who were 65 years of age or older. The median age was 38 years. For every 100 females there were 98.1 males. For every 100 females age 18 and over, there were 93.5 males.
The median income for a household in the city was $31,786, and the median income for a family was $37,039. Males had a median income of $28,229 versus $19,706 for females. The per capita income for the city was $15,138. About 13.4% of families and 12.2% of the population were below the poverty line, including 16.2% of those under age 18 and 4.7% of those age 65 or over.