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Bird Island was platted in 1878, and named for a bird sanctuary that once existed in a marsh nearby. After ditches and tile were installed, the area was converted to agricultural purposes, and is no longer an island. A post office was established there in 1881, and the town was incorporated in 1881. The community was established by Captain John King, a Civil War veteran, and other veterans of the war, who were entitled to 160 acres of homestead land. Bird Island Township encompasses the villages of Bird Island and Olivia. Bird Island is along US Route 212 in Renville County, in southern Minnesota. Other nearby communities include Bechyn, Buffalo Lake, Churchill, Danube, Hector, and Renville. Minneapolis, Minnesota is ninety-two miles east, St. Joseph is eighty-seven miles northeast, and Mankato is seventy-seven miles southeast of Bird Island.



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