It was established as a private subdivision of section 171 in the Hundred of Dalkey on the main road from Adelaide to Balaklava.

The Dalkey area was initially used for pasture, but soon settlers found it good for growing wheat, which was carted by horse or bullock wagons to Port Wakefield for further shipment.

A Lutheran school was built in 1868, also used as a place of worship until a separate church building was constructed between 1872 and 1875.

[2] The Dalkey Lutheran congregation moved to a new church in Balaklava in 1899.

[2] A new school was built at Dalkey in 1905 and closed in 1917 as part of cleansing German from public life during World War I.