The name "Gay City" comes from the name of the ancient mill town the park includes, named after the Gay family. First settled in 1796 by Elijah Andrus, leader of a religious sect, it grew to a mill-town of about 25 families, the majority of them were Gays. The residents kept to themselves and lived separately from other towns. They built a sawmill on the Blackledge River and a wool mill that became a successful business until the war of 1812. The mill was burned to the ground in 1830 triggering an exodus of the families to the urban mill cities. A paper mill was later built which revitalised the town but that too burned to the ground after the Civil War and the town was abandoned. Local lore has it that the park is haunted.