The origin of the Lancashire Heeler varies by what source one reads. According to Iris Combe’s work;  Herding Dogs-Their Origins and Development in Britain

opinion varies considerably as to whether these dogs are related to the corgi or not. Some authorities are convinced that this is so, while others believe the differences outweigh the similarities. From my own researches I feel the heeler is most likely a local variety of corgi or spitz dog which has been kept for generations within one particular district, in the same way as the Cardigan or Pembroke corgis. The only real evidence we have of his origin is that or his role of butcher’s heeler in Lancashire.

Ms. Combe goes on to say that there were at one time two distinct varieties: the Lancashire terrier type (black and tan similar to the Manchester terrier) and the Ormskirk type, which had white marking added to the coat and were a little longer in the leg. Ms. Combe says this about the old time use of the LHs: