The town was established when the shiekah let the poor people from Hyrule castle town live in Kakariko village the shiekah decided to start a new town not far from Kakariko in the eastern parts of Hyrule (this happens 15 years before ocarina of time). the town is home to the forgotten temple of magic. this is the place where the famous canes of Bryna, and Somaria were created by the famous wizard brothers Bryna and Somaria (who where Impa's older brothers)

This town is also the place where the evil Sheikah wizard named Majora and his apprentice Agahnim lived. (this happens 10 years before ocarina of time takes place) knowing that Agahnim and Majora were long time friends with Ganondorf, the wizard brothers Bryna and Somaria knew that the 3 men wanted to combine there magic power to take over Hyrule and even the whole world! Impa asked her older brothers to let her fight with them against the evil men but the brothers told her that she needed to stay and defend the town.

Just when the 3 evil men were about to use there skilled magic to increase there power, Bryna and Somaria attacked with there magic canes and managed to kill Majora (who was over 100 years old and not that physically strong) with relative ease. But Agahnim and Ganondorf where much harder for the battle lasted for hours on that rainy night. Knowing that Agahnim and Ganondorf couldn't be defeated the wizard brothers used a a time portal spell to try sending the villains 3000 years into the future in hope that someone in that time can defeat the evil men. But only Agahnim was only sucked in for Ganondorf grabbed on to a rock and avoid being sucked in.

When the portal closed Ganondorf retreated back to his hideout and to rethink a new way of taking over the world, while Agahnim was sent 3000 years into the future (to the time where link to the past takes place).

Victorious but badly wounded the wizard brothers both died of there wounds but told there crying sister, Impa, to keep there powerful canes in hope a hero would come and give the canes to the hero so it can be used to rid the land of evil. Impa accepts her two dying brothers wishes and does what she is told to do.

A few weeks had passed since that night and a mask salesman from hyrule castle town entered sheikah town (illegally) to find masks that he can find and sell later in hyrule castle town, he came to an old shack where the evil Majora and Agahnim once lived and found an odd mask called Majora's mask and decided to take it. (but that's another story).