The frontier town of Phandalin was built on the ruins of a much older settlement. Hundreds of years ago, the old Phandalin was a thriving human town whose people were firmly allied with the dwarves and gnomes of the Phandelver’s Pact. However, the same orc horde that sacked the mines at Wave Echo Cave laid waste to the settlement, and Phandalin was abandoned for centuries.
Around 1488 DR, hardy settlers from the cities of Neverwinter and Waterdeep began the hard work of reclaiming the ruins of Phandalin. A bustling frontier settlement had grown up on the site of the old town and it became home to farmers, woodcutters, fur traders, and prospectors drawn by stories of gold and platinum in the foothills of the Sword Mountains. Unfortunately, more than a few bandits and brigands settled as well, taking advantage of the fact that the area had no local lord or authority to chase them off. A gang known as the Redbrands took control of Phandalin in early 1491 DR, extorting and bullying everyone in town. The gang was led by a mysterious figure known to the townsfolk as Glasstaff and they used The Sleeping Giant Inn as their base of operations.
In the spring of 1491, an adventuring group (Dacien, Merick the Red and Viola Spiderworth) were hired out of Neverwinter to escort supplies for Gundren Rockseeker and his brothers for a secretive mining expedition in the Wave Echo Caves, located just outside of the town. They joined forces with a pair of adventuring gnomes (Silas and Oda) who were passing through town and together they liberated the town from Glassstaff and his Redbrand brigands. After the defeat of the Redbrand’s the adventuring party was awarded with the deed to the Sleeping Giant Inn. They promptly renamed it to the Owl’s Bar Tavern and Brothel and appointed the goblin Droop as the general manager. With that, the legendary Owl’s Bar Adventuring Group (OBAG) was born.
OBAG went on to uncover the mysteries of the nearby Wave Echo Caves that Gundren Rockseeker and his brothers had discovered. The caves contained an ancient magic device known as the Forge of Spells that was capable of imbuing items with powerful magic. With this discovery, and the quickly growing renown of OBAG, the small frontier town of Phandalin quickly grew into an influential seat of power on the Sword Coast and remains so to this day.