Lhwyd collected his fossils during a trip to Southwestern Wales. Number fifteen, in his etchings, he found near Llandeilo, probably on the grounds of Lord Dynefor's castle. He wrote of it: "The 15th whereof we found great Plenty, must doubtless be referred to the Sceleton of some flat Fish..." A century and a half after he wrote that, Sir Roderick Murchison would place the Llandeilo rocks in the middle strata of his Ordovician Period. A century after Murchison, scientists would date that strata between 461-63 million years old. That is less than ten million years after the first plants took root on dry land and a hundred million years before cockroaches crawled out of the sea looking for a snack.
Lhwyd's identification of number fifteen as a flatfish didn't last very long. Today anyone with even a casual knowledge of fossils will recognise it as a trilobite, something more like a shrimp than a halibut. Lhwyd didn't have our advantage of hundreds of years of fossil studies producing thousands of lavishly illustrated and easily accessible books. It would be almost a century before the word "trilobite" would be coined and into Murchison's time before the scientific world would realize that trilobites were not related to halibut or shrimp (or oysters, another contender) but, rather, something entirely their own. Lhwyd was plunging ahead in the dark trying to make sense of an unfamiliar and mysterious corner of nature.
Lhwyd deserves great credit for deciding his little flatfish was worthy of notice and for sending his drawings to the Royal Society, although, sometimes, he gets a little too much credit. His illustration is the first published scientific illustration of a trilobite that we know of, but he did not "discover" trilobites, as some books will tell you. We should always regard any claim that someone discovered a fossil species with suspicion. Trilobites are extremely common fossils and can be found laying on the surface in many parts of the world. Our ancestors were both aware of fossils and, in many cases, aware that they were the petrified remains of once living things. Usually, what an author means when they declare that this person or that person discovered a fossil is that they were the first to describe the fossil in scientific literature. Lhwyd's illustration certainly counts as a description in that sense, but it is not the first description we know of.
No one can say when people first noticed that fossils were different than other rocks except to say that it was very long ago. The first step in making stone tools is to examine stones very carefully, so it is possible that our ancestors were aware of organic patterns in rocks over a million years ago. For trilobites, specifically, the earliest evidence of humans treating a fossil as something specially comes from a cave near Yonne, France. In the 1880s, when archaeologists were combing the caves of central France looking for artifacts, bones, and paintings, they discovered a much handled trilobite fossil that had been drilled as if to be worn as a pendant. The cave where it was found is now known as Grotte du Trilobite and is also home to paintings of mammoths and woolly rhinoceroses. Because the pendant was handled so much, the exact species of trilobite cannot be determined, however, geologists can say that it was not originally from Yonne. The original owners of the fossil thought enough of it that they carried or traded it from the other side of France. The occupation strata in which the trilobite was found has been dated as fifteen thousand years old.
In the New World, American fossil hunters found plentiful deposits of trilobites in western Utah in the 1860s, but the local Ute Indians had known about them for untold years. In 1931, Frank Beckwith uncovered evidence of the Ute use of trilobites. Travelling through the badlands, he photographed two petroglyphs that most likely represent trilobites. On the same trip he examined a burial, of unknown age, with a drilled trilobite fossil laying in the chest cavity of the interred. He asked Joe Pichyavit, a Ute friend, friend what the elders said about such fossils. Pickyavit replied that trilobite necklaces were worn as protection against disease and bullets. The local Ute name for trilobite fossils translated roughly as "little water bug in stone," indicating that they recognised the organic nature of fossils. Pickyavit then made a necklace for Beckwith in the old style. Since then, trilobite amulets have been found all over the Great Basin, as well as in British Columbia and Australia.
Written descriptions of trilobites before Lhywd date possibly from the third century BC and definitely from the fourth century AD. Most ancient literatures include a genre called lapidaries, catalogs of precious stones and minerals along with their practical uses in medicine and magic (often the same thing). Most of the lapidaries included discussions of fossils and one, On Petrifactions by Theophrastus, was entirely about fossils. Sadly, the book has not survived and we know only short quotes from it in the works of later authors. The Spanish geologists Eladio Liñán and Rodolfo Gozalo argue that some of the fossils described in Greek and Latin lapidaries as scorpion stone, beetle stone, and ant stone refer to trilobite fossils. Less ambiguous references to trilobite fossils can be found in Chinese sources. Fossils from the Kushan formation of northeastern China were prized as inkstones and decorative pieces. A dictionary commentary written around 300AD by Guo Pu, refers to these fossils as bat stones because the spines on the pygidium (rear section) resemble the bones of a bat wing. The Khai-Pao Pharmacopoeia, written in 970 refers to the fossils as stone silkworms. Just nine years before Lhywd sent his letter to the Royal Society, Wang Shizhen wrote about the Kushan formation fossils a narrative of his travels in North China.
None of this should diminish Lhywd's place in the history of paleontology. Lhywd's observations were made within the framework of the emerging Western concept of science. The fossils were not interesting oddities that he found in the course of doing something else; they were the object of his outing. Lhywd took an artist along with him on his trip to Wales for the express purpose of preparing scientific illustrations. He communicated his observations to other scientifically interested people with the understanding that they would get further distribution. Finally, Lhywd gathered his fossils and took them back with him to the Ashmolean Museum where others would be able to study them.
As for number fifteen, it's not clear whether the fossil trilobite itself has survived. Modern curators at the Ashmolean have tried to identify Lhwyd's fossils in their collections. They have one old trilobite that approximately matches number fifteen, but they are unable to make a positive identification. The Romantic in me hopes its the one.