03854. New Castle New Hampshire Post Office. The building beyond is a church. The largest of several islands at the mouth of the Piscataqua River, this town was originally known as Great Island. Chartered in 1679 as a parish of Portsmouth, it was incorporated in 1693 during the reign of William and Mary. For a number of years, this was the seat of government, where meetings of the governor and council were held. New Castle is unique in the state, being the only town made up entirely of islands, connected to the mainland by bridges. New Castle is home to the Wentworth-by-the-Sea Hotel, where delegates to the Russo-Japanese Peace Treaty of 1905 stayed during negotiations held at the nearby Portsmouth Naval Shipyard. The treaty negotiation and signing, which elevated Japan to an international power at the conclusion of the Russo-Japanese War, was held in the Portsmouth area at the specific invitation of President Theodore Roosevelt