When the Fables first settled in America after the fled the Adversary who was conquering their worlds, all Fables lived together in a secluded community in what was then called New Amsterdam. As the mundane population around them grew, the human Fables began to pressure King Cole into removing the non-human looking Fables to a more isolated location, a decision that never sat well with the benevolent mayor. Thus, the Farm was born--a secluded piece of land many miles outside of New York.
The 13th Floor Witches placed enchantments around the land so that no mundy would accidentally wander in, but, in order to keep the knowledge of their existence safe, no non-human Fable could leave. This caused much resentment over time from the non-human Fables, especially since the man who was in charge of the Farm, Weyland Smith, was the most human looking being on the Farm.
After Weyland's unfortunate death, Rose Red was given power over the Farm, a decision that soon grew upon the other Fables in residence. Rose kept peace as best she could and became an integral part of the staging area for the final battle with the Adversary, as the Farm contained one of the fabled beanstalks from the Jack stories--a back door into the Adversary's kingdom.
Recently, with Mister Dark destroying Fabletown, all of the refugees have fled to the Farm, a situation some of the non-human Fables find ironic. However, rest is not to be received by the Fables, as Mister Dark's attacks have driven them away from the Mundane World to King Ambrose's magical kingdom , leaving the Farm vacant.