The site occupied by the Hellenistic town Demetriada had already been inhabited from the Neolithic period (Peukakia peninsula and westwards of the Theater). In the Peukakia peninsula and to the south a thriving settlement of the Early, Middle and Late Bronze Age
developed. It became an important commercial centre via which the Thessalic inland communicated with distant lands such as Thrace, Asia Minor, the Aegean Islands and Southern Greece. In the same area the town of Pagasses reached its prime in the classic period. Demetriada was founded in 293/2 BC by Demetrios Poliorcetes, who united adjacent small villages. The thus created town became a fortified military station of the Macedonian kings. The town, enclosed by a strong wall built according to the pseudo-isodomic system, was organized in two sectors, the Eastern and Western one. The so-called Anaktoron, built on a natural hill, and the Sacred Agora with the temple of Artemis lolia at its centre, prevail in the eastern sector.The town, part of the same sector, is laid out in building quarters according to the Hippodamian town-planning. The Theater and the Heroon in the western sector were built opposite to the Anaktoron. From the first century AD onward, Demetriada started diminishing. The pilasters of the Roman aqueduct, the two Early Christian basilicas and the houses with the mosaics date from this late, dull phase of the town. In the middle of the sixth century AD, Demetriada was abandoned and its inhabitants emigrated to the site of Kastro (Palia) of Volos. The newcomers named the site Demetriada which remained thus known throughout the Middle Ages.