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The word "Vejle" derives from the Old Danish word wæthel, meaning "ford" or "wading place" due to its location at a busy crossing over Vejle River.
The first recorded mention of the town is from 1256, and the first known merchant town privileges were issued by King Valdemar III in 1327. Nicolai Church in downtown Vejle have shown that there were residences in the area as far back as 1100.
The king's castle, Castrum Wæthel, was located where Vejle Transit Centre is today.
In 1796, though, Vejle was made the seat of the newly founded Vejle County, and the town expanded throughout the 19th century, benefiting from improvements such as a new harbour on the fjord, a railroad station, and modern utilities.
From the mid-19th century into the 20th century, Vejle developed from a provincial market town into a busy industrial centre, eventually becoming known as the "Manchester of Denmark" for its many cotton mills.
For a country where the highest natural elevation is only about 170 m (558 ft) above sea level, Vejle is known for the forested hills that rise to the north and south of the town and fjord.