After the establishment in 1849 of Sanpete County's first town, Manti, Mormon colonists under James Allred founded the Allred Settlement of Springtown along Canal Creek in early 1852. Sanpete's second oldest settlement was quickly bolstered by the addition of about forty Danish families, giving it yet another name, Little Denmark. Following Wakara (Walker) War skirmishes of 1853, a fort was built and settlers from nearby Fort Hambleton (later Mount Pleasant) moved in for protection. As hostilities intensified, however, the village was entirely abandoned and its occupants moved to Manti.

In January 1854 the fort and all of its dwellings were burned by Native Americans. After founding Fort Ephraim the next month, the Allred, Blain, and Larsen families as well as several other original founders of Spring City returned to reclaim the area and create a permanent town. Still, difficulties with local Indians continued and the colony was again temporarily abandoned in 1866. Following the resolution of Indian troubles in 1867, Spring City grew gradually but steadily, reaching a population of 850 in 1880 and a peak size of about 1,230 in 1900--roughly twice its present size.