Already in 1329 there should have been Falkenhain first settlements. Nevertheless, the place was first mentioned in 1462 as "Valkenhain", which is the basis for the history of Falkenhain. The place name is probably derived from the bird of prey.It was a mountain farming village, at an altitude of 583 to 660 m above sea level, in a side small valley of the Fallbach.
The profitable mining in the region, especially the mining of silver, tin and iron had little effect on the settlement Falkenhain itself.
The former sheep farm was equipped in the 18th century as part of the state sheep farming. From 1753 it belonged to the Altenberger Zwitterstocksgewerkschaft.
The old school building on Niederen Dorfstrasse served the villages of Dönschten and Falkenhain until 1907. The teacher's apartment was on the upper floor, and the large classroom at the bottom left, in which the classes were taught alternately in the morning and in the afternoon.
The old Dresdener Straße and the Falkenhainer mountain slopes played an essential role in the fighting of the Napoleon troops against the allies in August 1813.
Around 1900, Falkenhain farmers and landowners sold lands south of Falkenhain, on which the "Kolonie" Waldidylle was founded in 1900, which is still part of Falkenhain today. In the 1960s, weekend houses were built on small plots at the edge of the forest.Falkenhain and Waldidylle have been part of the region of Altenberg since 1999.