Albion was founded by a colony of Englishmen led by Morris Birkbeck and George Flower, and later his father Richard Flower. The American settlers in Edwards County, many of them war veterans of the War of 1812, mostly from Kentucky, viewed the English colonists with great suspicion. This was also because both Birkbeck and the Flowers were vehemently anti-slavery.
George Flower came to America in 1816. He and Morris Birkbeck, another Englishman, met and agreed to explore the western country with the idea of starting a colony of their own countrymen. After a long journey through Ohio, Indiana, and the Illinois Territory, they were so impressed with the beauty of the countryside around Boultinghouse Prairie that they knew they had found what they were looking for. They bought all the land they could afford, and eventually brought over from England more than 200 settlers, £100,000 in capital, and a carefully thought out selection of livestock and agricultural implements. The area became known as the English Settlement.
In 1824, the county seat of Edwards County was moved from Palmyra to Albion. Residents of Mount Carmel felt the county seat should be in Mount Carmel and not Albion. Four companies of militia marched from Mount Carmel toward Albion to seize the county documents stored in the courthouse. The situation was resolved by separating Wabash County from Edwards County at the Bon Pas Creek in 1824. The divided counties remain two of the smallest in Illinois.