The meaning of the name is disputed. It is Welsh and could mean "fort on a hill" (Caer-rhiw), "fort by yews" (Caer-yw) or simply "forts" (Caerau). It is pronounced /'kε:ru/, or more traditionally /'kε:ri/. The village grew up to serve the nearby Norman castle. The parish includes several other villages and hamlets, including Cheriton (around the parish church), Milton, Newton, West Williamston, Sageston and Whitehill.

Typical of South Pembrokeshire, the parish has been predominantly English-speaking since the 12th century.