The Chatham township is not to be confused with the Village of Chatham, which is a separately governed and maintained municipality that is geographically within both the Town of Chatham and also the Town of Ghent.

Chatham has a rich and diverse history, with early settlers primarily from Holland and Germany who introduced much industry and agricultural growth to the area. The Rutland Railroad had a major hub in Chatham for many years that brought travelers to and from the New York City area, the Boston area and New England, the Albany and greater Capital Region, and even further into central New York.

Chatham is bordered by the towns of New Lebanon, Canaan, Austerlitz, Ghent, and Kinderhook in Columbia County, and the town of Nassau to the north in Rensselaer County. Chatham is also popular for including the northernmost point of the Taconic State Parkway where it merges with a portion of Interstate 90 (commonly known as the Berkshire Spur). Popular state routes include SR 66, SR 203, and SR 295, and county roads include CR 9, CR 13, CR 17, CR 28, and CR 32. Many roads in Chatham are rural and even unpaved.

Within the entire township of Chatham, there are a number of smaller regions called hamlets that usually are only distinguished by having separate postal offices and occasionally may be zoned differently.