Located near Watertown, Castlewood, SD is home to nearly 650 residents and is the poster child of a charming small town! If you have a family, get ready to fall in love with Castlewood, as they also house both a highly-rated school and a reputation for being a safe community. Named for a place mentioned in the 1857 novel The Virginians by William Makepeace Thackeray, Castlewood is also a great place to live, thanks to its low cost of living and easy access to larger towns like Watertown and Brookings.