Founded in 1851 by trance medium James L. Scott and jointly led by renowned Christian mystic Thomas Lake Harris after 1852, the spiritualist colony was located on Osborne Creek in Fayette County's Mountain Cove district. Receiving a "call to the mountain," where a spiritualist utopia could become a "new Eden," Scott led some 100 members from a spiritualist circle in Auburn, New York, to the property on the James River & Kanawha Turnpike. Among the migrants were families with the names of Hunt, Hopping, Dwight, Nichols, Norton, Sheridan, Cottrell, and Piggot.

Industrious and resourceful, community members established a church, a mill, two stores, and a school for their children. Members lived in their own private homes, while sharing common spiritualist beliefs and communitarian values. They published the first newspaper in Fayette County, the Mountain Cove Journal and Spiritual Harbinger, a vehicle for disseminating spiritualist views as well as promoting economic development.

Spiritualism is the belief that life continues after death and that the living can communicate, usually by means of a medium, with spirits of the deceased. Scott and Harris taught reliance upon the leader as being the only means for members to communicate with the spirits. This charismatic authoritarianism was soon challenged by believers who wanted to seek contact with the spirits directly, an idea appealing to women as well as men. Soon, Nancy P. Hunt could hear "rapping" and feel "a tingling of her feet," which meant to her that a spirit was trying to contact her.

Conflict erupted within the community when Scott demanded adherence to "mutualism" which required all private property be subject to divine direction that was available only through him. Controversy over leadership and spiritualist beliefs raged within the community during 1852—53. Scott and Harris departed, and community property was dissolved. The Mountain Cove communitarian experiment, inspired by the Second Great Awakening, soon melted into the diverse fabric of West Virginia history.