The first European settlers arrived in the Murgon area in 1843, taking up land which is now known as Barrambah Station. Murgon derived its name from a lily pond located on Barambah Station. The rich and fertile land was used for agriculture and dairying. Logging was another prosperous industry. The town didn't start to develop until the early 1900s. Large properties were divided into smaller allotments, and the local population increased. The town was surveyed and the sale of these lots took place in 1906. A butter factory was opened in 1913 and a grain shed was built the following year.
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