Before Farwell came into existence, there was a small settlement to the northwest known as Posen. The original site, laid out on a five-acre tract in lowlands, was not too well picked as it had a tendancy to go under water when the stream came up. Flood waters and a disastrous fire caused the citizens to look for a new town site and in 1893 all remaining buildings of the old town were moved and thus became the "Village on the Hill".