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Cheltenham, like the suburbs of Beecroft and Epping, was built on land that formed part of the Field of Mars Common, and is located in the parish of the Field of Mars. An early name for Cheltenham was Basketmaker's Plain, probably derived from the trade that was carried out at the nearby timber-getting establishment. The baskets were used to carry charcoal. 
Cheltenham railway station, built in 1898, was the last of the main line stations between Strathfield and Hornsby Junction to be opened. It was built at the request of William Chorley, who owned a large parcel of land that he wished to subdivide. He suggested Cheltenham (his birthplace in England) as a suitable name for the station, and paid for the construction of a footbridge across the railway track.
To maintain the value of the land, Chorley placed a covenant on the subdivision to prevent the overdevelopment of commercial operations and to stop unnecessary destruction of the surrounding bushland. Because of this, the area has retained its residential status and bushland character.
Cheltenham Girls High School, on a site of just over six acres (2.4 hectares) purchased from Mrs VH Vickers for £11,650, was officially opened in 1961, although it had been operational since 1958.