In the copy I have, there's an author's note at the end, where Mr. Rounds explains that back in 1917/18, they had a blind range colt on their ranch in Montana. And, further, his father said that when he was a boy, he had a blind mare for a "Sunday horse."
The blind colt began learning early the thousands and one things that a colt must know before he can take care of himself. Because he was blind he not only had to learn the things all colts must learn, but many others besides. For a week or so he stuck pretty close to the mare's side, and she saw to it that they stayed out where the ground was level with nothing for the colt to run into.
So it was only natural that he soon came to the conclusion that all the world was flat, and that he could travel safely anywhere.
What he did not know was that this Badlands country was criss-crossed and honeycombed with gulleys and washouts of every size, shape, and description, and that sooner or later he would have to learn about them.
So, while it's definitely fiction, The Blind Colt has its basis in fact.