Don’t capitalize volcano.
Change the comma after accident to a period.
What does it refer to? The town? The volcano? For clarity, change It has to The volcano has.
Change which is to which are (because properties is plural).
Change life to live.
Add a comma after homes.
In the last sentence, change was rumored to is rumored (unless the rumor no longer exists).
This town wasn’t built in a volcano by accident. The volcano has healing properties, which are of great importance to the people who live there. The town itself looks unexciting with its old-fashioned homes, but it has a whimsical atmosphere. The main attraction is the wishing well, which is rumored to have been built many decades ago by a troll.
The words unexciting and whimsical don’t seem quite right, but I cannot ask the writer of the original what they intended, so I can’t say what words would work better to express that.
(WordPress’ spellchecker wants built in to be hyphenated as if it were being used as a compound adjective — it isn’t — and, as always, insists that hyphenate isn’t a word.)