In the Middle Ages, Lipnica developed along the Hungarian trade route. In 1326, King Ladislaus the Short founded the town under the Środa law; in 1379, the location law was changed to the Magdeburg law and the town was surrounded by a wall with gates.  After several fires and the Swedish Deluge in the 16th and 17th centuries, the town declined. Until the end of the 19th century, the only brick house was the former starost's station, known as the lord's house. The city could not be revived in the 1920sand lost its municipal rights in 1934.

The medieval layout of the buildings has been preserved to this day, with a quadrilateral market square measuring 55 by 60 metres and pairs of streets diverging from the corners and connecting to the perimeter streets. Wooden houses, mainly bourgeois, from the 18th and 19th centuries, stand around the Market Square.  They are single-storey buildings with hipped roofs and are set back from the Market Square by gables with pillar-supported arcades. The oldest house, dating from 1841, can be seen on the north frontage, while the west frontage features a 17th-century brick old starost's house. The square was the scene of past important patriotic, political, and religious events.  A tall column of St Simon of Lipnica, commemorating the village's most famous resident, was erected in the Market Square in 1913 by the foundation of Lipnica resident Franciszka Ledóchowska.

The most valuable building in the village is the wooden Church of St Leonard  built(Link to the description of Lipnica Murowana ) at the end of the 15th century, the interior of which is covered with colourful polychrome paintings, the oldest from the time of its construction and from the 16th century. The church has been a UNESCO World Heritage Site since 2003 . (Link to the description of Lipnica Murowana)