The act was triggered by the complexity of creating the low-cost railways that were needed at the time in rural areas, and by the successful use of tramway rules to create the Wisbech and Upwell Tramway in 1882, which was in fact a light railway in all but name.

However, limits were particularly needed when lightly laid track and relatively modest bridges were used in order to keep costs down.

Many of the railways built under the auspices of the act were very basic, with little or no signalling (many ran under the 'one engine in steam' principle).

The procedure of the 1896 act was simpler, permission easier to obtain (local authorities had the right to veto lines under the 1870 legislation), and there was a 75% savings on rates payable as compared to a tramway.

By the 1920s the use of road transport had killed the majority of these little railways, although some survived thanks to clever management and tight financial control.