Nelia is a small isolated town, which was named by the explorer Landsborough in 1861 as he was leading a party in search of the lost Burke and Wills expedition. Landsborough named the surrounding country side as Nelia Lakes after a lady Nelia in England, who was a friend of his wife.
Settlement first came to the area in 1876, when S.G. Watts overlanded from Victoria to take up what were the Willibah and Benannee runs. It was on part of these runs, consolidated in 1897, that the township of Nelia grew. The township was surveyed in 1912 and the first land sale was held in 1913.