Karuizawa used to be a postal town. In the Edo period there weren't many highways in Japan but the Nakasendo was one of them. Linking Kyoto and Tokyo, it passed through the central mountains and linked East and West Japan. If you want to visit, August during Obon is a great time when it's a lot cooler than Tokyo but also there is the forest Bon Odori, something to be seen to be appreciated.
Karuizawa became a talking point at the end of the 19th Century when it was found by the foreign missionaries to be a pleasant retreat from the heat and humidity of Tokyo (hence it being cooler). It then became a place of notoriety when the Emperor met his "wife to be" on the tennis courts here. And from then it became a ski area, Shinakansen station and location of the only statue of Sherlock Holmes in Japan.
However, one of the reasons I enjoy the area so much is its unspoken history. In the main center you can see many photographs of days gone by that show you the town as it grew. But in some of the small little cafes, one of which is between the two Route 18's (different story), there a place where the mama-san has been looking after travellers since she must have been a girl. And on the wall is a photograph of her and John Lennon, sitting, having coffee. His wife was Japanese after all, and this was a place he could relax.