The village is located within Surrey Township about 4.0 miles (6.4 km) west of the city of Clare.

[3] The south branch of the Tobacco River flows through the village and contains the Mill Pond reservoir.

[6] Farwell was founded in 1870 by Edmund Hall, John Van Riper, and George Hitchcock.

The Farwell post office opened on January 20, 1871, with George Hitchcock serving as the first postmaster.

The Flint and Pere Marquette Railroad had plans of expanding into the area on a new route connecting Saginaw to Ludington, which was completed by the end of the decade.

The new community was named after New York native Samuel Farwell, who had an interest in the railroad and was a construction contractor.

[7][8] In 1982, the Rock Road massacre occurred to the west of Farwell in Garfield Township.

Due to its proximity to the village, it became known as the "Farwell Murders" and brought national attention to the area.