The English settled first on the James River, in 1607. Almost immediately, Christopher Newport and John Smith explored upstream and discovered the falls where Richmond is now located. In 1679 William Byrd I acquired lands there, and that same year Thomas Jefferson (great-grandfather of the Thomas Jefferson who served as President) moved upstream and built Osborne at the falls.
Thomas Randolph acquired his Tuckahoe tract upstream from the Fall Line in 1710, and his brother Isham Randolph purchased his Dungeness tract nearby. Peter Jefferson, father of the future president, married Isham's daughter and moved to Tuckahoe in the early 1730's. Peter continued the migration upstream, purchasing Shadwell and other tracts along the Rivanna River. 1 Other members of the gentry with names like Nicholas, Cary, and Meriwether acquired large land grants, and later small parcels were patented to those who had less money and fewer political connections but a willingness to actually settle on the frontier.2
In 1732, William Byrd II had Richmond surveyed - 125 years after Newport and Smith had sailed to the falls of the James. Clearly the James River was the major stream flowing through Virginia into the Chesapeake Bay but Governor Spottswood sought to encourage settlement up the Rappahannock River in the second decade of the 18th Century.

Why would Spottswood try to spur development in a separate watershed, rather than encourage settlement on the James River?
Spottswood mixed opportunities for personal economic gain with his official responsibilities. In 1714, he arranged for supposedly-abandoned immigrants from the German Palatinate and Swiss cantons to be settled on lands he controlled at Germanna. Spottswood disguised their primary activity, to develop his iron deposits, by describing the settlers as defenders of the frontier. In 1716, he arranged for a field trip across the Blue Ridge, reportedly awarding the participants little golden horseshoes as mementoes to remember his expedition to explore available real estate.