What were the factories? Why were they called so?

The factories were the space or a warehouse where goods are kept and stored for further process. It also had the offices inside, where officials of the company sat. Later, Company convinced traders and merchants to settle near the factory as the trade was expanding.

This might be called so because when the first English factory was established in 1651, this was used as a ‘base’ by the traders of the company, who at that time, were known as ‘factors’ operated.