Colony was founded in 1886 by John Homer Seger as a settlement for Arapaho after conflicts with white settlement on their lands. Seger had arrived in the region in 1872 to work at the Indian agency on the Cheyenne and Arapaho reservation. Seven years after founding Colony, he began an industrial training school which largely taught farming and agriculture to the Native American residents (who included Arapaho and Cheyenne but also members of other tribes).