The Answer
It was originally a made-up town, created by cartographers to prevent others from copying their maps. To the surprise of the mapmakers, it eventually became a real town.
When making maps, it’s common for cartographers to include a few paper towns, completely made-up towns that are added to stop other mapmakers from copying their work. If another map contains a town you made up, you know their map is plagiarized, and you can sue them for copyright infringement.
Agloe was one of these towns. In the 1930s, General Drafting added the fictional town to their maps at a dirt road intersection in the state of New York.
A few decades later, Agloe appeared on a Rand McNally map, and General Drafting threatened to sue. To their surprise, they learned that no copyright infrigement had occurred, since their made-up town had become a real place.
Some time in the 1950s, a general store had been built at the intersection and was named Agloe General Store after the town that appeared on General Drafting maps. A few houses even popped up around the store, enough that Agloe was officially recognized by Delaware County (who then informed Rand McNally).
In recent years, the store went out of business and the people moved out, but the story of General Drafting’s oddly prophetic paper town has remained.
Bonus Biscuit
How did the town get its name? The founder of General Drafting (Otto G. Lindberg) and his assistant (Ernest Alpers) used an anagram of their initials.