In 1853 there was a great deal of activity in the lower Lakes area. In March the first steamer crossed the Lake. (The Mary Anne commanded by Captain W. R. Randell.) Captain Cadell was publicising the advantages of River Murray trading. The Port of Goolwa and its connecting rail link to Port Elliot were being constructed and the settlers in Strathalbyn wanted access to the Lake as well.
As a result the Surveyor General, Arthur Freeling ordered the survey of a township on the lakeshore in the Hundred of Bremer. Lance Corporal Dawson of the Sappers and Miners inspected the area in November 1853 and chose the site of the future Milang. This site was near the end of the existing road from Strathalbyn to the Lake and occupied a slight elevation above the surrounding countryside.
The first 73 allotments were laid out in December 1853 and January 1854 and subsequently gazetted on the 15th June 1854 with the first lots being auctioned in Adelaide on the 13th July.