Most historians believe the name of the town is derived from the ancient Celtic word "Penceat" which means "edge of wood" and refers to the fact that the surrounding area was once covered in a dense forest. The original Celtic words of which the name was composed referred to "pen", "head", as in the Welsh "pen" (used in Penearth) and "ceat", "wood", similar to the Welsh "coed" (used in Betburys-Y-Coed).
In the Victorian era this area was a fashionable place to live as it was right on the doorstep of the Crystal Palace. It is now somewhat unfashionable.
Penge is also the Danish word for money.