The toy industry was the term used to describe a number of metalworking industries that produced small goods; hinges, buttons, belt buckles and hooks are all examples of goods that were once considered "toys". The term "toy" was used starting in the early 18th century to describe the industry in the British midlands, and changed to its modern form (as in games) years later.

Although the toy industry tended to be based on small cottage manufactories at first, the rise of the middle class in London created a demand that led to rapid expansion of the industry in the mid-18th century. At this point economies of scale started to come into effect, and a number of very large manufactories were built, leading to the common use of the term "factory". These factories typically had a number of designers that could be called on for any sort of work, while different parts of the building were dedicated to mass production of different sorts of goods. These early factories were an early step on the road to the assembly line, and an important factor in the creation of the industrial revolution.

One major name in the toy industry is Matthew Boulton, who built a "model manufactory" called Soho near Birmingham. From the late 1770s on Soho dominated the toy industry in England, producing high-quality steel buckles, buttons, sterling silver, and Sheffield plate. His industrial methods and metalworking made him a natural partner for James Watt, and the two, both members of the Lunar Society where they met, would go on to build steam engines all across England. Boulton also put the engine to his own use, powering his plants and introducing a clever powered coin press which was almost completely automated. Boulton also introduced many of the industrial innovations used today, including not only defined shifts and eating periods, but group welfare and insurance policies that taken for granted today.