Laguna Beach is the second oldest city in Orange County, second to Anaheim.
Settlers arriving after the American Civil War found scarce amounts of land available for homesteading, and one such tract, known then simply as “the public lands” was the coastal strip from Laguna Canyon to Three Arch Bay. During the 1870s, a small community named Arch Beach had been started at the mouth of Bluebird Canyon. By the early 1880s most of the land around its small Post Office and general store had been subdivided. At about the time that Orange County separated from Los Angeles County and became independent in 1889, the community was caught in an economic downturn.
When the economy renewed itself, the decision was made to relocate the town to the mouth of Laguna Canyon. This was possible because a dispute with the Irvine ranch over the public right to traverse Laguna Canyon had been resolved in the courts, allowing an additional means of access to the coast. The streets were laid out in a grid plan despite the location’s hilly nature, which has resulted in some streets having extremely steep inclines.
The region was originally known to the Spanish as “La Cañada de Las Lagunas” which means “The Canyon of the Small Lakes”, in reference to two lakes found near the head of Laguna Canyon. However, in confusion with the word “Lagoon”, Laguna Beach was nearly misnamed “Lagoona” by the State of California. While it was still an unincorporated community, the Postmaster, Nicholas Isch, journeyed to Sacramento to rectify the mistake, and the original Spanish spelling was retained.