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Canal Winchester is part of the Columbus, Ohio Metropolitan Area. The city was named after the nearby Little Miami Railroad Canal and a grist mill on Big Walnut Creek that was powered by water from this canal. The town grew rapidly in its early years due to its location along several major transportation routes: it lies at the intersection of two major railroads (the Little Miami Railroad and Pennsylvania Railroad), as well as U.S. Route 40, which runs through downtown; Interstate 70 passes just south of Canal Winchester but does not provide direct access to it (as there are no exits within city limits). In addition, State Route 3 crosses through downtown near where US-40 intersects with SR-3's northern terminus at I-70 eastbound; SR-161 also passes through downtown near where US-40 meets up with I/70 westbound before continuing northward towards Plain City and Marysville respectively.