The area upon which Canonba lay is on the traditional lands of Wangaaypuwan dialect speakers (also known as Wangaibon) of Ngiyampaa people.

[6] The association of colonial settlers with the area dates from the time of the second expedition of the explorer and surveyor-general Sir Thomas Mitchell, in 1835.

The area was outside the boundary of the Nineteen Counties—within which the colonial government of New South Wales allowed settlers to purchase land—but, from 1836, specific sections of land could be leased there for an annual payment, under the Squatting Act, 1836.

Seeking water for their stock during a dry period, seven stockmen—working for William Lee and Joseph Moulder—drove 600 head of cattle off a legal grazing lease and into the area near the Canonba waterhole.

It seems the cattle muddied and polluted the waterhole angering the traditional owners, who attacked the stockmen, killing three, and wounding three others.

Mounted Police from Bathurst, augmented by some stockmen, made a reprisal attack, at Duck Creek, that became a massacre.

The village was proclaimed in 1866 and a town plan published in the same year, making it one of the earliest official settlements of the region.

[31] In 1870, Canonba was described as "rather a nice town, being built principally of brick, and is in the heart of one of the finest squatting districts in the colony."

By 1870, the village had a court of petty sessions, three public houses with a fourth on the way, some stores, and the usual trades of a rural settlement—saddle and harness makers, blacksmiths, tailors, bootmakers, wheelwrights—orchards and a vineyard; John Brown had built himself a double storey house of brick, overlooking what was by then being called a town, and a public schoolhouse awaiting a teacher.

Another settlement nearby, Girilambone, was established, in 1880 as a private town associated with a copper mine, and it was also on the railway line from 1884.

By 1887, the town no longer had a bank, just one public house and one store, and its church was described as "roofless walls", its belfry having been dismantled.

[8][44] The design of the village was altered to reduce the scale of the settlement and more realistically reflect its diminished future prospects.

[10][50] The old village site lies just on the upstream side of where the modern-day Canonba Road crosses Duck Creek.