Sherwood was born in Stanford, New York. After attending the local public schools, he attended the Hudson River Institute in Claverack, New York, and Antioch College in Ohio. He then studied law at the Ohio Law College in Poland, Ohio. After finishing school in 1857, Sherwood became the editor of the Williams County Gazette in Bryan, Ohio. Sherwood was married to Kate Brownlee Sherwood and had two children, James and Lenore. Sherwood first entered politics in October 1860 when he was elected the probate judge of Williams County. Because of the Civil War, Sherwood's term as judge was short.