In Domesday, Bridgwater has the appearance of an agricultural settlement. But, as its name indicates (believed derived from a term either meaning "quay" or "gangplank"), its location on the River Parrett, at a point where that tidal river could still be crossed before widening and flowing into the Bristol Channel, was allowing the location to act as an informal port. Bridgwater was probably the demesne land of a larger manor. The bridge that existed in medieval times, however, may not have been built until borough status was acquired for Bridgwater in 1200.

This was the initiative of William Brewer who, in 1199, had acquired Bridgwater through an exchange. The following year, he obtained from King John permission to build a castle there, and also a royal charter giving the status of liber burgus to Bridgwater; it was in fact the second place in England to obtain that status by explicit charter grant. The grant enabled Brewer to endow Bridgwater with privileges of his choice (as far as was within his power) associated with established boroughs; it explicitly included the rights to a market and a fair, to collect tolls and for the burgesses to be free of tolls elsewhere (such being rights only the king could grant). It did not however alter the fact that Brewer and his heirs remained lords of the borough, controlling the courts – although the gild appears to have had its own court to deal with internal matters. The burgesses did not hold the town at fee farm until the fifteenth century; the town was incorporated in 1468, when the gild and borough courts were probably integrated and a mayor became the executive officer.

The nucleus of the settlement lay on the west bank of the river; there were probably only a few hundred inhabitants (313 burgages in 1257). Brewer built his castle in the north-east corner and the topography of the town suggests that some new streets may have been laid out between the parish church and the waterfront, including a marketplace. A bridge across the river – its building associated by local tradition with Brewer – led to the development of an eastern section of the town; the bridge would have been one point for toll-collection, which is the main reason it required a "keeper". Some kind of fortifications were added in the late thirteenth century, but perhaps not beyond stone gates at the main entrances.

Brewer went on, in 1204, to a second "free borough" foundation, at Chesterfield in Derbyshire, part of a royal manor granted him by John, along with licence for a market and fair. Several years prior to obtaining lordship he had already been active in acquiring property that was on the edge of the settled area and on which a new marketplace had been established, larger than the cramped original of the manor. Whether this new marketplace was an initiative of Brewer or local residents, possibly as far back as the 1160s, is not certain; similarly, since 1195 the king had been paid an annual fee for the right for a fair to be held at Chesterfield. At the least Brewer, who after John's abortive rebellion in 1194 had come into temporary possession of Chesterfield along with Prince John's other Midland estates and the shrievalty of Derbyshire, was capitalizing on what he perceived as a growth in trade. But it seems likely he was fostering that growth from about 1194, expanding the new marketplace and perhaps initiating the fair. The Pipe Rolls following that year show an increase in the revenue expected by the king from Chesterfield, and by 1198 it was being described as a burgus in the rolls. The 1204 charter was simply the culmination of Chesterfield's evolution from village to town.

The motivation for such foundations was financial: to stimulate the commercial development of a settlement, and take a cut of the profits, e.g. through tolls from visiting traders, rents from settlers attracted to a free borough, and larger numbers of court fines or administrative fees that growth in commerce and industry brought with it. In Brewer's case, he may also have had in mind the provisioning of his castle at Bridgwater, whose presence also provided a special clientele for goods and services. But his actual vision appears broader; Brewer seems in fact to have been something of a speculator in commercial growth, and might be considered the most important founder of boroughs during John's reign, which saw the peak for grants of liberties to boroughs. That Brewer witnessed 44 of the 98 such charters has led to speculation [R.V. Turner, Men Raised from the Dust: Administrative Service and Upward Mobility in Angevin England, Philadelphia, 1988] that he may have served as the king's negotiator with urban representatives in such matters. As early as 1190 he had ensure a weekly market was among the rights when Richard I granted him the royal manor of Somborne in Hampshire. In 1199 he was granted Bakewell in Derbyshire, but surrendered it a few years later; it did not develop into a market town until the latter half of the next century. In 1209 he obtained a royal charter giving Axminster, Devon, borough status, along with a market and fair, and a few years later was protecting his investment by suing Sidmouth (some 15 miles distant) and Lyme Regis (5 miles away) for having established markets that he considered unfairly competitive. In 1221 he acquired a 3-year lease of the borough and fair of Great Torrington, Devon, and in the year of his death (1226) the king granted him a market at Newton Poppleford, Devon.

By the mid-fourteenth century Bridgwater was Somerset's most prosperous town. Goods such as wine were being shipped between Bridgwater and France (notably Bordeaux), Spain, Wales and Ireland, and the Bardi were using it as one shipping point for their wool exports. Although there was some economic decline towards the end of that century, in the next the town benefited from a steady trade in cloth and from being made a separate port, for purposes of customs collection, from Bristol.

Once the foundations of self-government had been acquired from the lord of a community, local authorities felt themselves empowered and obliged to begin shaping the details of the local constitution. The set of ordinances above, undated but probably from the first half of Henry III's reign, clearly does not represent the initial constitution, for the community already had a fundamental institution of self-government in its gild, and possessed a communal seal. The preamble suggests the document to be more of a constitutional retooling consequent to political disagreements within the community. Perhaps differences of policy between the mercantile interests and those of the rest of the community: the provision for two elected stewards may have superseded a single gild leader, with this duality reflected in two gilds serving the parish church, one for merchants and one for other townspeople (a duality seen at Chesterfield). The constitutional adjustments are typical in their concern for defining town officials and the scope of their responsibilities, enforcing obedience to those officials, requiring accountability for borough revenues, and addressing abuses contrary to the interests of the community.