In 1278, the Venetian general Marino Gradenigo built a fort in the Palechora area, called the "Selino Kasteli". The fort gave its name to the whole province, previously known as 'Orina', which was then renamed 'Selino'. The fort was destroyed in 1332 and rebuilt in 1334. Near the fort, the Venetians established a new settlement for workers and merchants called Vourgos. The general Hayreddin Barbarossa destroyed the fort in 1539, but it was refurbished in 1595 by Dolf. In 1645, the Turks conquered the town and modified the fort to suit their needs.

In 1834 an English traveler named Robert Pashley found the fort completely destroyed and the whole area uninhabited. Only a granary and one or two small buildings remained. In 1866 the resettlement of Paleochora began.

In December 1866, during the Cretan uprising against the Ottoman Turks, the British gunboatHMS Assurance evacuated some 340 women and children from Paleochora, then known as Selino Castelli (or Selino Kastelli), and took them to Piraeus for safety. This caused a major international incident since the Ottoman authorities accused the British of siding with the Cretan rebels. Russian gunboats followed suit, evacuating refugees from Loutro and Sougia, east of Paleochora.

During the Battle of Crete during World War II, the town was the scene of fighting between motorcycle-riding troops of the German 95th Reconnaissance Battalion and the Eighth Greek Regiment (Provisional) with elements of the Cretan Gendarmerie. The Germans built a number of gun emplacements by the Venetian Fortezza, and their remains are still visible.

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