In 1681, King Charles II of England granted William Penn a colony in America to pay a debt the King owed Penn's father. This land, east of the Susquehanna River, was an area almost as large as England. In 1736, Iroquois Indians signed a treaty that deeded to the Penn's the Susquehanna River and lands west, including the area that became Hanover.
However in 1727, Marylander John Digges obtained a warrant for 10,000 acres from Charles Calvert, fourth Lord Baltimore. This grant, Digges' Choice, also covered land that became Hanover. By 1730 settlers were securing land deeds from Digges in and around present day Hanover.
Charters granted to Penn and Lord Baltimore conflicted. This disputed area between the colonies, known as Rogues Roost, became a haven for people avoiding taxes. A temporary line was established between the two colonies in 1739, which became the Mason-Dixon Line in 1768, placing Hanover in Pennsylvania.
In 1745 Richard McAllister, a Scotch Irishman, purchased land from Digges establishing the original town of Hanover.