Lilydale was known as Germantown when the area was first settled.

The Lilydale area was settled in the 1850s; when the land was cleared for saw milling, many of the original settlers were of German origin, although a number of families changed their Anglicised their surnames to escape vilification.

This is less true today, however many of the original families still maintain connections to Lilydale.

Located 25 km north east of Launceston, Lilydale, nestling under the northern slopes of Mount Arthur (1187m), is an attractive town noted for the diverse range of interesting bush walks in the district.

Mount Arthur offers energetic bush walkers a three hour (round trip) walk to its summit which is rewarded by far-reaching and dramatic views.

Lilydale Falls (3 km out of town on the Scottsdale Road) are an opportunity to explore temperate rainforest, have a picnic, go bush walking, inspect the two small falls, and marvel at two oak trees which were planted on 12 May 1937 from acorns collected near Windsor Castle on England. The oaks commemorate the coronation of King George IV.

Hollybank Forest Reserve arboretum has walking tracks, picnic facilities and an interesting Information Centre.

Lilydale itself is particularly noted among locals for two key points. The first being an alleged large number of sightings of the Tasmanian tiger, the second, a series of painted telegraph poles along the main street.

Aside from tigers and poles, Lilydale is also known for the distinctive 'Englishness' of its gardens and is promoted as ‘Tasmania's Country Garden’.