Shannon City was established in 1887 on the Chicago Great Western Railroad line as it passed through Union County. The main part of the town lies in sections 35 and 36 of Grant Township, and a part of the town lies in Ringgold County. The towns first school house was established in 1890 at one time the Town had four churches, United Presbyterian (1892), and Adventist (1893), later purchased by the Roman Catholics (1907), Methodist Episcopal (1898), and Christian (1903). The town grew to have two banks, a lumberyard, hardware, and several general merchandise stores.