During the reign of the Loud family in Loch Loud, Lolo was the protector of the loch and the truest friend of the duke. After the Louds decided to sail away one day, they eventually returned to Loch Loud. However, by the time they returned, Lolo had been placed under the mind control of a villager named Aggie, who held a grudge against the Louds for how they could not provide her with peace and quiet. Under Aggie's control, Lolo forbade the Louds from entering Loch Loud and attacked their ship until the Duke handed over his crown, believing that Lolo had deemed him worthy no more after Lucille explained the ancient lore behind dragons. After returning the crown to Loch Loud, Lolo was freed from Aggie's control, but since the Loud family had been driven away permanently, she presumably fled into hiding, where she laid an egg that hatched about 400 years later.
The Loud House Encyclopedia