[3] Shelby Township was established in 1858, and named after Shelbyville, Indiana, the former home of an early settler.

Cemeteries in the township include the following: Old Willow Creek, Pioneer Shelbyville, Pleasant View and Saint Paul's Lutheran.

The township's main inducement to settlement was its rich prairie loam, rendered still more attractive by the availability of wood lots along the Blue Earth River.

In addition to its 315 residents, it also sustained a small but thriving village known as Shelbyville, located in Section 35, about two miles south of modern Amboy.

At that time, the township's population was 800, and it remained at approximately the same level for the next thirty years.

The main catalyst for change was the St. Paul and Sioux City Railway (later a part of the Omaha Road), which in 1879 built a north–south branch line through Blue Earth County.

In several townships along the proposed route, residents offered the railroad financial incentives to locate a depot in their vicinity.

A week earlier, however, a group of farmers residing two miles north of Shelbyville had made the railroad an offer of their own.