The Dorothy Improvement District No. 246 was formed on December 18, 1913.  On February 13, 1932, it was included in the Municipal District of Lone Butte which became part of the Municipal District of Berry Creek on April 1, 1933, which later became part of the Special Areas in 1936.

Two hundred families farmed in the area at one time.  Most of the land that used to produce wheat crops has been reverted to grassland and now supports cattle ranching. 

With the coming of the railroad in 1928, three grain elevators were built in Dorothy: an Alberta Wheat Pool, a United Grain Growers, and an Alberta Pacific.  The Alberta Wheat Pool was still operating at least as late as 1971.  The United Grain Growers elevator was torn down in 1931.  The Alberta Pacific remained in business until 1951.  Later, a large farming operation in the area acquired it to use for grain storage and were still utilizing it as of 1971.  The last scheduled train service through Dorothy ended in 1968.  

To avoid navigating a steep winding trail on the south side of the Red Deer River a grain chute was constructed from metal pipe.  The chute ran about 300 feet down the hill into an overhead bin at the bottom of the hill where a truck would pick up the grain and take it to the elevators a mile away.  In the fall of 1929, the south grade was built down to the ferry ending any further need of the chute.  The materials from the chute were salvaged and the bin was put into use on a nearby farm.

C.R. Kidd built a general store in the fall of 1928, but by the fall of '31 went broke.  Many were having a hard go of things during this time, so Mr. Kidd generously let them have their purchases on credit, realizing that his chances of collecting were slim.  Later, he worked for the elevator in Drumheller, and then operated the Drumheller Ford dealership, before selling out to participate in an oil discovery northwest of the city.  He and his wife retired in Calgary.

Initially, Catholic Church services were held in residents' homes around the community. In 1941 a former school was moved in and used for church services. In 1943 the Wilford School was bought for fifty dollars and moved to Dorothy.  The new Catholic church was blessed by Father Anderson on a Sunday in June 1944.  The last Mass held in this church was on October 22, 1967.  

Across the road is the United Church.  When discussing how to raise funds for a church, residents decided on organizing a chicken supper and making quilts and then holding a bazaar to sell them.  Enough was raised to buy a house in 1932.  It was moved 25 miles from Finnegan into Dorothy.  As no large trucks were available, the house was moved with horses and smaller equipment. The last service held at Dorothy's United Church was in 1961.  

Although small, Dorothy still holds its vibrant community spirit.  In recent years, both of the churches have been restored, and there are talks of repairing the grain elevator that was damaged by a storm on July 22, 2015.