Gaithersburg began in 1765 as a small agricultural settlement known as Log Town. The first house within the current Gaithersburg was built by Benjamin Gaither in 1802, and the name was changed in his honor. In 1873 the B&O Railroad constructed a station at Gaithersburg, designed by Ephraim Francis Baldwin as part of his well-known series of Victorian stations in Maryland. Rapid growth occurred shortly thereafter, and on April 5, 1878 the town was officially incorporated as the City of Gaithersburg.

In 1899, Gaithersburg was selected as one of six global locations for the construction of an International Latitude Observatory as part of a project to measure the earth's wobble on its polar axis. The Gaithersburg Latitude Observatory is the only National Historic Landmark in the City of Gaithersburg. The observatory and five others in Japan, Italy, Russia, California, and Ohio gathered information that is still used by scientists today, along with information from satellites, to determine polar motion; the size, shape, and physical properties of the earth; and to aid the space program through the precise navigational patterns of orbiting satellites. The Gaithersburg station operated until 1982 when computerization rendered the manual observation obsolete.

Gaithersburg has an elected, five-member City Council, which serves as the legislative body of the city. The Mayor, who is also elected, serves as president of the council. The day-to-day administration of the City is overseen by a career City Manager.

The city of Gaithersburg occupies 10 square miles in the heart of Montgomery County, Maryland. The latitude of Gaithersburg is 39.143N. The longitude is -77.201W. The southeastern border of the City lies just 13 miles from the northwestern border of Washington, D.C., and 18 miles northwest of the U.S. Capitol Building.