At the age of 71, Ambrose Bierce decided to travel to Mexico. The year was 1913 and the Mexican Revolution was in full swing. Bierce disappeared without a trace (source).
Owl Creek is real. It bordered the Shiloh (Tennessee) battlefield and is now a canal (source).
A soldier named John McCreath Farquhar fought for the Union in the Civil War and later became a member of Congress. Maybe Bierce heard the (weird) name and liked it.