The manor of Chipeete was mentioned in Domesday and a castle was subsequently erected, its twelfth century stone keep perhaps preceded by a late eleventh century wooden fortification; the castle chapel was a St. Mary dedication, later transferred to the parish church. This church lay immediately east of the castle; its fabric, including numerous and elaborate carvings, is twelfth century and it was mentioned in 1134, when given to a Benedictine priory recently established at Kilpeck by Gloucester Abbey, some distance south-east of the church. But it has been tentatively connected with a pre-Conquest foundation. The Romanesque church – relatively well-preserved, since economic decline of the area in the Late Middle Ages limited later alterations – is suspected to have been built by Hugh, the son of the William Fitz-Norman to whom Kilpeck was given after the Conquest; later generations of this family took the name de Kilpeck and retained possession of the manor up to 1244, when the male line died out and it came, by his (second) marriage to one of the co-heiresses, to William Walerand, already a prominent Wiltshire land-owner. Outer baileys were added to the castle on all sides except that where the church stood; the date of this expansion is unknown, but had probably been accomplished by the beginning of the thirteenth century, as the castle facilities were sufficient to host King John and his retinue on several occasions. Early settlement – for which archaeology (not extensive) has discovered nothing dating earlier than late twelfth century – clustered around the church and most was protected by a rectangular enclosure still well-defined by modern streets.

William Walerand's son, Robert (ca.1212-1272), one of Henry III's household knights and justices, obtained in 1259 a licence for a Friday market and two fairs in May and October at Kilpeck. We need not imagine that this represented the initiation of such events at Kilpeck, but instead see it as an advisable step, in an age when the monarchy was casting closer scrutiny on claimed seigneurial rights, by a man who was not a Kilpeck heir, for he was a child of William Walerand's first marriage. One of William's sons by Isabel Kilpeck had entered holy orders and the other died in 1255, which may have been when Robert came into possession of Kilpeck. But he needed a firmer basis on which to defend his market rights there, should they be challenged; hence the licence, which he was well-positioned to obtain. It is conceivable, however, that he took this opportunity to strengthen the market through planting a borough within Kilpeck, although admittedly this could have happened under an earlier Walerand or de Kilpeck lord.

Yet Robert Walerand appears an attractive candidate for a town-founder. He had already (1247) acquired a fair licence for his manor of Whaddon (Wilts.), which had been the family's base since the Conquest, although Robert himself lived in Gloucestershire at Siston (inherited from his mother) and was sheriff of that county in 1246. Robert also held Stogursey (Somers.) where, before 1225, a new borough had been established around a marketplace, in association with an existing castle and village; Robert only acquired it by royal grant after the town foundation, and following its forfeiture from the troublesome Fulke de Breauté. Robert's widow would obtain licence for market and fair at Frampton Cotterell (Gloucs.) in 1285. Robert's half-brother, John, who was a cleric but also in royal service, obtained a market and fair licence in 1265 for the manor of Cottenham (Cambs.), where he held the living of the parish church.

Robert Walerand also served Henry III as Seneschal of Gascony in the early 1250s and then on a diplomatic mission to the papal court, before returning to his work as a justice itinerant. During the conflict between Henry and the Montfortians, Robert at first took a moderate position and seems to have been trusted by both sides and respected for his abilities, though he fully supported the king when war broke out. In these years his roles included warden of castles, sheriff of Kent (1261-62), and warden of the Cinque Ports. Having no children, Robert Walerand's heir was technically his late brother's son, but he was an idiot and a minor (and thereby in royal custody), so Robert arranged for Kilpeck to go to his sister's son, Alan de Plogenet, who inherited in 1273 and in 1299 was followed by a like-named son.

Alan I had renewed in 1267 the market licence for the manor of Haselbury Pluknett in Somerset, which he had recently acquired from William le Marshal – it of course acquired the 'Pluknett' element after Alan's acquisition. In 1292 he was faced with a quo warranto proceeding to justify administering the assize of bread and ale at Kilpeck; he defended his right to possession on the grounds described above. Although Alan I's tenure of a market was not challenged on that occasion, Alan II de Plogenet renewed Kilpeck's Friday market licence in 1309 and obtained authorization for a fair at different date (August) from the earlier ones. It is not known why he felt this necessary. Perhaps he was concerned that his right to the manor was open to challenge upon the death, that same year, of the idiot grandson of William Walerand, and felt the licence renewal would make his possession more secure. Or perhaps Kilpeck's market and fair had been experiencing difficulty finding a clientele – or had been neglected by Robert Walerand, so occupied with his work for Henry III – and had fallen into abeyance, so that Alan I had not been exercising his market rights (which does not mean an informal market had not continued to be held). Alan II dying (1325) without male heir, Kilpeck passed by marriage to Edward de Bohun, who granted it to the Butlers, absentee lords who neglected the castle, so that it became ruinous. Neither of these bothered to renew the licence, so perhaps Kilpeck's markets and fairs were still not proving profitable enough to warrant the outlay.

The notion that Kilpeck may have become a market town is conjectural. No reference is found to a borough, burgesses, or burgages, but the existence of an urban settlement within Kilpeck has been postulated on the grounds of:

One possibility for a market site is a triangular area at the end of the street through the settlement enclosure, adjacent to the churchyard; this street may originally have been a stretch of a through-road running roughly south-west/north-east, with a deviation to reach the church and possible marketplace. Another candidate is an undeveloped area between the enclosure and the castle, just south of the churchyard. A similarly open space on the north side of the churchyard has produced evidence of iron-working – notably production of horseshoes – in late twelfth to thirteenth centuries. These open areas were kept free of buildings to avoid compromising the castle's outer defences immediately west of them.

The value of the manor was declining from the early fourteenth century. The castle lost importance after Alan II Plogenet died and the manor came into the hands of the Butler family resident in Ireland. Archaeology has produced no evidence of medieval occupation in the settlement after mid-fourteenth century, nor do any of the houses in modern Kilpeck incorporate any medieval fabric. The Black Death was perhaps the final nail in the coffin of any market town there, and the priory was dissolved in 1428. Post-medieval settlement had the character of a small village and a sense of virtual abandonment is given today, with most houses in Kilpeck now lying outside the area of medieval settlement.