The town is named after a river flowing through it, the Otselic, which is an Oneida word for "place of wild plums."
The Otselic Valley is the predominant feature as well as the connecting route within the town and to the north and south.
The Town of Otselic lies on the north border of Chenango County and is northwest of the City of Norwich.
The first settler arrived around 1800. Many of the original settlers came from Connecticut. The Town of Otselic was founded in 1817 from part of the Town of German.
The year 1833 was notable for a tornado that passed over the town that measured over a mile in width.