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is a town in Washington County in central Vermont. It is also the name of a village within that town. The population was 4,915 at the 2000 census.
The location where Waterbury now lies was once the frontier between the Mahican and Pennacook people. European settlement of the area dates from 1763, when King George III granted a charter for land in the Winooski River Valley. James Marsh became the first permanent white settler in the region in 1783. Many of the early settlers came from Waterbury, Connecticut and named their new town in honor of the hometown.
The state opened the Vermont State Asylum for the Insane here in 1891.. The institution survives here to the present day, renamed the Vermont State Hospital.
The Village of Waterbury was incorporated in 1882 with a population of over 2000.
Like many New England towns, Waterbury's economy was based around the local river mill industry and the surrounding agricultural producers. The mills produced products such as lumber and finished wood products, wicker products, leather, starch, and alcohol. The agriculture was based on sheep through the 19th century but switched over to dairy farming by the 20th Century. Waterbury had a ski factory in the 1940s, The Derby & Ball Company. In 2007, Rome Snowboards has their office in a building that Derby & Ball used to occupy.
In 1927, Waterbury, like many other Vermont communities, was devastated by flooding. Inscriptions on the sides of some buildings in Waterbury village purport to show where the level of the water rose during the 1927 flood. The village recovered and in 1938 the Little River Dam was built by the Army Corps of Engineers to control future flooding.