In March of 1775, the Transylvania Company, under the leadership of Judge Richard Henderson and scout Daniel Boone, purchased a huge land tract that encompassed northern, central, and western Kentucky, from the Cherokee Indians at Sycamore Shoals on the Watauga River, in North Carolina. By May, the Transylvania colony and its capital - Boonesborough, located in Madison County - were formally established. Source: http://www.kdla.ky.gov/resources/countyomonth/madison.htm
Madison County was originally Madison County, Virginia and was formed from Lincoln County, Virginia. It was the 6th Kentucky county formed and was created on 1 Aug 1785.
Fort Boonesborough information:
Fayette on the north, Clark to the northeast, Estill on the east, Jackson in the southeast, Rockcastle on the south, Garrard in the southwest and Jessamine to the northwest.