Well the village was founded by refugees from a nearby kingdom. They were the remains of a minor noble house who lost their holdings during a blood feud with two others. With the few political favours they had left, they were given the land they currently live on now, though they didn't know the area was covered in dense forest.

On the bright side they are exempt from taxes though as the kingdom they now live in collects taxes based on how much farmland a settlement has. Having no actual farmland has not been a bad thing (unless of course there is a sudden population explosion).

It's a bit more involved than that but those are the basics. =P