The late Baron Reinhold created St. Mystere and all its inhabitants for his daughter Flora.
His love for Flora was so great, he devised an elaborate scheme to ensure that she wouldn't be alone after his death.
While the baron's daughter, Flora, was still very young, his wife, Violet died from influenza. After cheering up after her death, he vowed to love Flora as much as he had loved his wife, and cared for her greatly.
Only a few years later, he found out that he was terminally ill. Knowing that his time was running out, he decided to build a village to protect her from the outside world until she could be cared for properly. Along with his long-time friend Bruno, who had experience building and constructing machines, he began his work. They built the village of St. Mystere and its residents. The robots that populated the town were built to be puzzle enthusiasts in order to test anyone who came there. The person he was looking for to take care of Flora needed to be smart enough to pass through the riddles set before them.
Chapter Nine: The Tower's Secret
When Luke unlocked the door to the hidden room in Reinhold Manor, he, Flora, and Professor Layton found piles of gold. A voice recording of the baron stated that taking the treasure will result in a complete shutdown of the village, including the robot residents. The baron wanted Layton to close St. Mystere forever, but Layton said it was Flora's choice. With her kind heart, Flora decided not take her inheritance and leave the village as it is, as thanks for the villagers' care.
Spoilers end here