Owner Sir Ray Tindle CBE DL, directors, management and staff hosted the centenary event at the Plas Hyfryd Hotel in Narberth, the town where printer Walter Burgess founded the 'paper in 1906.
Guest of honour was High Sheriff of Dyfed, Mr. Johnny Thomas DL, who described the centenary as an 'amazing achievement'.
Also in attendance were a number of civic dignitaries, including Deputy Mayor of Narberth, Clr. Wynne Evans, Mayor of Whitland, Clr. Conwil Harries JP, chairman of Pembrokeshire County Council, Clr. Clive Collins, and chairman of Carmarthenshire County Council, Clr. Jim Jones.
Representatives of several clubs, groups and organisations were also invited to share in the celebrations.
They were welcomed by Sir Ray who said: "The Observer is a small newspaper dedicated solely to this area, but all of us who work on it bid you the warmest welcome you could receive from any newspaper or any town anywhere in Wales or the United Kingdom.
"By your presence all of you - our distinguished guests - do us enormous honour on this, the greatest day in the history of the 'paper."
Sir Ray said: "The Observer has had its share of luck to help it on its way to its centenary, but it has needed more than luck to see it through two World Wars, five recessions since the Second World War and an announcement in the national press in February 1978 that the 'paper and its sister, the Tenby Observer, had closed for financial reasons. "The '70s was a bad period for local weekly newspapers in general and for the Observer in particular. But every cloud has a silver lining and it was a good day for me when I read that report in the Daily Telegraph and came to Wales.
"Both 'papers today are flourishing. Their joint circulation in the early part of 1978 was 3,700. Today, it is nearly 8,000. Their pagination has gone up from 12 to 32 or more and this week was 88 and their finances have gone from ghastly losses in the '70s to reasonable profits and security today.
"The main reason why this tremendous change has come about and the factor beyond luck which has brought us to this celebration is the marvellous staff who are all here at these tables. They have done it. I merely changed the direction and emphasis of the 'paper in 1978 from being county- wide to being local, really local.
"These good people and the readers and advertisers have brought the Observer brilliantly to its 100th birthday: Clare Townend, Neil Dickinson, Ann Revell, Ceris Hewlings, Paul Evans, Jenny Deverson, Julie Whild, Kim Head, Sue Cottrell, Patrick Ovenden, Carolyn Cox, Ann-Marie Cattell, Monica Williams, John Smith, Kevin Jones, Barbara Stredder, Ivy Vickery and Bernie Lawrence.
"Newspapers are only as good as the people who make them and these newspapermen and women are the very best. My Farnham colleagues, Brian Doel, Wendy Craig, Bernard Mew, Lady Tindle and Sam Doel and I have nothing but praise for them. We are very proud of the Observer and all who sail in her."
Sir Ray also paid tribute to the founder of the Narberth and Whitland Observer, Narberth printer, Walter Burgess, who achieved a sell-out with his first issue.
"He had to print another 300 copies as the first 600 went the same day," said Sir Ray. "A wise newspaperman, Walter Burgess kept the front page entirely for advertisements!"
And it was fitting that Walter Burgess's grandson Alec Munt and great-grandson John Munt were able to be present for the celebrations and Sir Ray extended them a warm welcome.
Indeed, a century on, history was repeated as last week's 88-page edition, featuring a special 48- page souvenir supplement, vanished from the news stands within hours of going on sale.
"We are grateful to all our readers and advertisers and our wish and our solemn pledge on this our 100th birthday as an entirely independent newspaper, independent of all political parties or influences, is to go on serving them without fear or favour for another 100 years."
A toast to the guests was proposed by Sir Ray, while the loyal toast was proposed by Brian Doel, group managing director of Tindle Newspapers Ltd. The High Sheriff of Dyfed, Johnny Morris DL, said the luncheon was a 'wonderful occasion'.
"It is a privilege to be here to celebrate this amazing achievement of 100 years of printing this local newspaper, the Narberth and Whitland Observer," he said.
A former president of the Veteran Car Club of Great Britain from 2001 to 2003, the High Sheriff shares Sir Ray's love of driving pre-1905 motor cars, and he reminisced about their efforts trying to coax their vintage cars on the London to Brighton run over the years, before congratulating Sir Ray and his team for being 'so far-sighted and saving this newspaper from disappearing forever'.
The High Sheriff, who was resplendent in the uniform worn by his great-grandfather when he was High Sheriff of Carmarthen in 1912, also spoke of Sir Ray's rise through the newspaper industry and how he founded the family company, Tindle Newspapers Ltd., at Farnham, Surrey, in 1969.
"The Narberth and Whitland Observer is now one of over 200 weekly and monthly titles in various parts of the country," said the High Sheriff.
"Sir Ray's services to the newspaper industry have not gone unrecognised and in 1973, he was awarded the OBE and in 1987, the CBE. He was knighted in 1994.
"Sir Ray has still got a twinkle in his eye and in 2005, he was named Newspaper Personality of the Year.
"Knowing the history behind Sir Ray, it comes as no surprise that the Narberth and Whitland Observer, is celebrating 100 years and I am sure that we are all very proud to be associated with him."
The High Sheriff then proposed a toast to Sir Ray and the Narberth and Whitland Observer.
Civic dignitaries present also added their own congratulations, including chairman of Pembrokeshire County Council, Clr. Clive Collins and chairman of Carmarthenshire County Council, Clr. Jim Jones.
On behalf of the people of Whitland, Mayor, Clr. Conwil Harries JP said that he always looked forward to reading the Observer.
"The Observer was sold out in Whitland, which is a credit to you all. Thank you on behalf of the people of Whitland."
Deputy Mayor of Narberth, Clr. Wynne Evans, paid tribute to Observer staff past and present. "We think very highly of them all and thank them for all that they do for Narberth. The Observer is our local newspaper."
Prior to the lunch, grace was said in both Welsh and English by the Rev. Kingsley Taylor, of Whitland, and the Rector of Narberth, Rev. Peter Lewis. Later, bouquets were presented to the lady guests on the top table, while Sir Ray presented a 100- year-old silver dish to the High Sheriff, as well as a silver locket to 12-year-old Shelley Harries, of Narberth, the youngest town crier in Wales, who was invited to act as 'Master of Ceremonies'.
In addition, as a memento of the occasion, all guests received a 'goodie bag' containing a number of commemorative gifts, including a mug, an Observer teddy bear, pen and notebook.