A penal colony is a settlement used to exile prisoners and separate them from the general population by placing them in a remote location, often an island or distant colonial territory. Although the term can be used to refer to a correctional facility located in a remote location it is more commonly used to refer to communities of prisoners overseen by wardens or governors having absolute authority.
Historically penal colonies have often been used for penal labour in an economically underdeveloped part of a state's (usually colonial) territories, and on a far larger scale than a prison farm. In practice such penal colonies may be little more than slave communities. The British, French, and other colonial empires heavily used North America, Australia and other parts of the world as penal colonies to varying degrees, sometimes under the guise of indentured servitude or similar arrangements.
The British used colonial North America as a penal colony through a system of indentured servitude. Merchants would transport the convicts and auctioned them off to (for example) plantation owners upon arrival in the colonies. It is estimated that some 50,000 British convicts were sent to colonial America and the majority landed in the Chesapeake colonies of Maryland and Virginia. Transported convicts represented perhaps one-quarter of all British emigrants during the 18th century. The State of Georgia for example was first founded by James Edward Oglethorpe by using penal prisoners taken largely from debtors' prison, creating a "Debtor's Colony". However, even though this largely failed, the idea that the state began as a penal has stayed both in popular history, and local lore. The British would often ship Irish and Scots to the Americas whenever rebellions took place in Ireland or Scotland.