Named for 1822 settler David Shelby, this town grew up at the mill of German pioneer Otto Von Roeder. The Ohlendorfs, Vogelsangs, Rothermels, and Vanderwerths arrived in 1845; other Germans came in ensuing years. The post office opened 1846 with Shelby as postmaster. A school (1854), an agricultural society, a singing society and a band were started. Mission work, begun in 1876, led to founding of Peace Lutheran and St. Paul Lutheran churches. By 1900 there were at least a dozen businesses here. Decline of farming led residents to live on ancestral land and work in cities.