Panama, Nebraska  Panama is a village in Lancaster County, Nebraska, United States. It is part of the Lincoln, Nebraska Metropolitan Statistical Area. The population was 256 at the 2010 census. In 1879, the Panama Cemetery Association was formed and raised funds to dig a well. Panama was originally founded one mile south of its present location but was moved in order to be closer to the railway. In 1888, the village was officially founded on land that was previously owned by Moses J. Mitton, John Forrest, and Gilbert F. Steeves. According to local folk history, the village's original by-laws contained a clause inserted by a descendant of Gilbert F. Steeves, Caroline "Carrie" Steeves, which stated that if the village allowed any business to sell alcohol in the village, the Steeves family would reclaim the land they had deeded to the village. Panama was incorporated as a village in 1904. New by-laws and ordinances were enacted when the village was incorporated and again in 1977, but it is still illegal to sell alcohol in the village. The village was likely named after the Isthmus of Panama, which had gained notoriety at the time due to the United States' involvement in building the Panama Canal. Panama is located at (40.597640, -96.510599). According to the United States Census Bureau, the village has a total area of , all of it land. As of the census of 2010, there were 256 people, 90 households, and 66 families residing in the village. The population density was . There were 100 housing units at an average density of . The racial makeup of the village was 98.4% White, 0.8% African American, 0.4% Asian, and 0.4% from two or more races. There were 90 households of which 41.1% had children under the age of 18 living with them, 66.7% were married couples living together, 2.2% had a female householder with no husband present, 4.4% had a male householder with no wife present, and 26.7% were non-families. 21.1% of all households were made up of individuals and 8.9% had someone living alone who was 65 years of age or older. The average household size was 2.84 and the average family size was 3.36. The median age in the village was 38 years. 32.4% of residents were under the age of 18; 3.9% were between the ages of 18 and 24; 23.2% were from 25 to 44; 29.3% were from 45 to 64; and 11.3% were 65 years of age or older.