Counties were not planned in advance to be part of the English settlement in Virginia in 1607. The new colony was a private company's investment, and was governed by the stockholders of the company until it went bankrupt and the charter was revoked by King James II. Governance of Virginia, including the formation of counties and cities, evolved in reaction to unplanned events. In 1607, there was no expectation that the venture capitalist's investment in a foreign land would result in government of the people, for the people, by the people.
The Virginia Company of London was managed by a council in London, orginally appointed by King James I. The company sent its colonists to the New World without even announcing who would be the local leaders in Virginia. When the Susan Constant, Godspeed, and Discovery finally reached the James River, Captain Newport opened the sealed envelope with the London Company's instructions - and had to release Captain John Smith from confinement, so the prisoner could take his place on the resident council.
By 1617 the Virginia colony had been divided by the Virginia company into the Incorporations of Henricus, Charles City, James City, and Kecoughtan. In 1618 King James I granted the Third Charter with provisions for elected representatives to help govern the colony.
In 1619 the 11 small settlements within the four Incorporations elected representatives to the first General Assembly. In addition to those 11 settlements, there were also "particular plantations" outside the direct control of the London Company. The first General Assembly rejected representatives that were elected from Martin's Brandon, in today's Prince George County, because that particular plantation had highlighted that they were governed by separate rules.1
Starting with the 1619 meeting, the General Assembly handled executive, legislative, and judicial issues for the Virginia colony. The assembly created the first courts to handle small lawsuits in 1621, but the population increase - to about 5,000 colonists in 1634 - caused the administrative workload to become a hassle. In 1634 the General Assembly chartered eight shires, which were called "counties" afterwards.
The first eight counties were the four existing Incorporations (Henrico, Charles City, James City, and Elizabeth City - which replaced the "heathen" name of Kecoughtan) plus four new areas: Accomack, Charles River, Warrosquyoake, and Warwick River.
The boundaries of the eight counties were drawn so most colonists could reach their county court sessions, where justices dealt with property issues and criminal accusations, in one day. County boundaries would be defined and revised for many reasons until the last county of Virginia (Dickenson) was created in 1880, but the primary basis for drawing Virginia's county boundaries was to make the courts accessible.
Until 1624, the colony of Virginia was a business managed by the equivalent of a plant manager with a local oversight board. The company's "Board of Directors" was the members of the London Company in England.
Management direction from that distance was weak, and conflict among members of the council in Jamestown was intense at times. In the early days of Jamestown, one local member of the council was executed as a Spanish spy and John Smith was threatened with execution by his Council rivals. The explosion of his gunpowder pouch in 1609 while he slept, which damaged his thigh and caused him to return to England in October, may not have been an accident. Recently, excavations at the original fort have revealed the first clear evidence of an Englishman murdered by another in the colony. ("Office politics" were rough at times...)
To attract settlers after the "starving time" in 1609-10 and the failure of the colony to thrive, the London Company offered potential investors a great deal of flexibility in creating new settlements. Shiploads of settlers were sent to Virginia to create largely self-sufficient "hundreds." The name reflected the anticipated number of new settlers required to establish a permanent community. These new "hundreds" were required to be at least several miles from any existing community, and "Bermuda Hundred" became a famous place name on the James River during the Civil War.
Within the London Company, there were internal disputes between investors who wanted to maintain strict discipline over colonists, as reflected in the "Laws Divine, Morall and Martiall." The faction led by Thomas Smythe finally lost control to the group led by Edwin Sandys, and in 1618 the company adopted the Great Charter. The new group sent a new governor, Sir George Yeardley, to Virginia with the intention of making the place attractive to new settlers, in part by granting greater freedom and in part by sending more woment across the Atlantic so English families could be established in Virginia.
In 1619, representatives from the separate communities assembled to form the first House of Burgesses. However, after the Native American uprising of 1622, it was clear that the Virginia colony would never be profitable. The colony might be an outpost of English culture and government in the New World, but the stockholders would never get a good return on their investment.
In 1624, King James I took official control of Virginia by revoking the London Company's charter. Virginia was ruled as a royal colony of the king (as opposed to a proprietary colony, where authority was granted to an individual such as William Penn or Lord Calvert) until the American Revolution.
The House of Burgesses continued to meet after King James assumed control. The Virginia legislature first created official local governmental units in 1634. The decision reflected the population growth of the colony, which triggered a need for official decisions that were local and not of concern to the entire House (or appropriate to delay until the next session of the House of Burgesses). The local units of government were called "shires" only in the original act. Ever since, they have been described as "counties" - but the key law enforcer in most county governments is still known as the shire reef, or sheriff.