The Village of Monee was founded by Augustus Herbert in November of 1853 when he recorded his plat of land at the Will County Courthouse on November 25.

The Village is believed to be named for a French-Ottawa Indian woman, Marie LeFevre Bailly. She was the daughter of a French fur trader and half-French, half-Ottawa Indian woman. Her father died when she was eight years old and her mother took her to live with Indian relatives. While young Marie was called "Mah-ree" by the French, the Ottawa had no sound for corresponding with the letter "r" and thus called the little girl "Mah-nee." French treaty clerks later wrote the name as "Mo-nee."

An Indian princess, Marie was renowned as one of the most beautiful women in the Northwest (Mackinac Island) area. In 1833, the Treaty of Camp Tippecanoe made with the Pottawatomie made a gift of property to the four daughters of Marie and her husband Joseph Bailly. The tract encompassed what is now Raccoon Grove, with the intersection of Egyptian Trail and Pauling Road being the center of 1,280 acres.

It is not clear, however, why the site in eastern Will County was chosen as a gift to the girls, unless Bailly foresaw that somewhere at the end of Lake Michigan a great commercial center would develop. This gift of property is possibly the only link between "Princess Monee" and the village named in her honor. Chicago's first mayor, William Ogden, purchased the reservation from the Bailly family in 1851 for five dollars an acre.