This municipality is located in the interior part of Bohol. It is said to have been so called because of the grass (balili) which grew in abundance in the locality. Balilihan means “a place where plenty of grass grows.” It is said to have been organized as a municipality in 1828. It used to be a part of Baclayon and was sparsely settled. The seat of government was in the then sitio of Bay-sa-Iring but was later transferred to the present site because of the scarcity of water in that area.