Okaloosa County is a county located in the U.S. state of Florida.Its county seat is Crestview. Its largest city is Fort Walton Beach. Okaloosa was an Indian word meaning "a pleasant place," "black water" or "beautiful place". Okaloosa County is the sole county in the Fort Walton Beach-Crestview-Destin MSA. Okaloosa County has a total area of approximately 1,082 square miles of which 86% is land and 14% water. As of the 2000 census, there were 170,498 people, 66,269 households, and 46,520 families residing in Okaloosa County, FL.