The distinction between Highlands whiskies and Lowlands whiskies dates back to the Wash Act of 1784 when taxes were raised to bring in much-needed revenue to pay for the Napoleonic War. These taxes worked differently north and south of the geographic line, with Lowlands duty set at 2.10 pounds sterling per gallon of capacity per year while it was just 1.1 pounds in the Highlands.
Meanwhile, because much of the whisky produced in the Highlands (especially the less legal whiskies) was consumed locally, it escaped many of the tax increases that all-but bankrupted the industry in the Lowlands and resulted in lower quality whisky being produced. This meant that Highlands whisky gained a reputation as the better quality produce and grew in popularity.
Because the landscape of the Highlands is so varied, the whiskies that come from it are equally varied and the region is normally split up into four geographic sub-regions when we talk about their flavours and characteristics.