A characteristic of Tanum is the large number of small villages, again mostly along its coastline. The background to this is historical, to do with fishing - mainly during the herring periods, but also the upsurge in coastal freight and stone quarrying in the late 19th century and into the 20th century. The villages inland often developed around important junctions. Tanumshede, itself once an important trading point between coast and areas further inland, became the central place when several small municipalities combined in 1971.