Panola County is a county located in the U.S. state of Texas. As of the 2010 census, its population was 23,796. The county seat is Carthage. Located in East Texas, the name of the county is derived from a Native American word for cotton.Up to 2013, Panola County was one of approximately thirty entirely dry counties in the state of Texas, which means that the sale of alcohol was restricted or prohibited.