Diamond Swamp Creek in the County of Roxburgh is a northern tributary of the Fish River, flowing south through good agricultural land which had been taken up by a number of landholders such as Lawson and Mitchell in the early 19th century. The original land grants were located on the right bank of the Macquarie River in 1818, according to Governor Macquarie's plan for the settlement.

In 1825, Lord Bathurst had issued instructions regarding land policy that the colony was to be divided into counties, hundreds and parishes. Consequently the Bathurst district was divided into townships with blocks on which the scale of land grants to free settlers was determined. As part of this policy, new land boundaries were created. The counties of Bathurst and Roxburgh were created and the dividing line between these two was the Macquarie River. Part of the town of Bathurst lay on the right side of the river was named Kelso and was subsumed into the County of Roxburgh.