The town is named after a mythical creature, known as the Bunyip or Bunyeep, which according to legend lived in and around swampy areas.
The Bunyip shopping precinct consists of a wide variety of businesses. These include a post office, chemist, hair dressers, Fast food shops, grocery stores, accountants and real estate agents, a bakery, a newsagent, Commonwealth and Bendigo banks, hardware and timber merchants, Lawn mower outlet, a veterinarian and two pubs (known locally as the Top Pub and the Bottom Pub due to their position on the sloping main street). In 2007 the Foodworks franchise came to the town when it opened a large supermarket.
Bunyip has an "opportunity shop", with proceeds donated to local organisations. Previous businesses have included Westpac Bank, a drapery store (owned and serviced by Mr and Mrs Frederick Mitchell for many years), a real estate store, 2 petrol/garages (BGS Motors & Frank Kinder's BP), Pound and Ure's Electrical store, a gift shop, shoe shop, Flett's general store, cool store on the corner of Hope Street and Railway Avenue and Manson's Interstate Haulage.