It has a population of approximately 350. It was named after the ship Lady Nelson, which was used by Lieutenant James Grant in explorations of the area in the early nineteenth century.
A punt was built across the river in 1848 by Henry Kellett. A summerhouse was also built in 1848, which later became the town’s current hotel. The town site was surveyed and named in 1852 by Lindsay Clarke, and sheep grazing began soon after.