I was just reading Stephen King's book The Tommyknockers and the main character made a reference to the town of Blessings, Utah going crazy in 1884. I searched through the Internet and couldn't find anything about it. I was wondering if you guys knew whether the incident was made up or if it actually occurred.

That's a fictional reference most likely. If you Google it and the only results you find are questions exactly the same as yours it's rather likely that it doesn't exist.