Georgetown is located in the north of a region known as "Central Texas," an area settled largely by German immigrants in the 19th century.

The region's economy split naturally into two zones: farms in the fertile blackland prairie to the east, orchards and ranch land in the rugged hill country to the west. Georgetown straddles the divide between these two zones; this dividing line became the Chisolm Trail, evolved into a US highway, and eventually became today's bustling Interstate 35.

This location gave the town a bustling trade economy from early on, a well-developed town center, and the state's first University, a private Methodist institution called Southwestern. But geography is also bringing Georgetown's small-town glory to a close, as the city of Austin expands up the I-35 corridor and Central Texas' warm weather and unique culture lure retirees from colder climes.