Bally was originally known as Goshenhoppen, an American Indian name meaning "meeting place". Mennonites and Catholics settled it in the early 1700s. Clergyman Ulrich Beidler erected the first house of worship, the Mennonite Church in 1731. Father Theodore Schneider, a Jesuit priest, came to the area in 1741and established what would be just the third Catholic mission church in the 13 original colonies. On land received from the Mennonite community, Fr. Schneider built St. Paul's Chapel in 1743. That same year Father Schneider started a Catholic school at the mission church. The school, originally called St. Aloysius Academy, also marked the beginning of Catholic education in the 13 original colonies. The school, after several name changes, is currently known as St. Francis Academy. It is the oldest continually operated Catholic school in the nation.

To reflect the many churches in the town, Goshenhoppen was renamed Churchville until 1883 when the post office was established. The post office was named Bally for Fr. Augustin J. Bally, a Catholic priest and spiritual leader of the town's Catholic Church, Most Blessed Sacrament. Subsequently, the town was renamed in honor of Fr. Bally, a greatly admired man.In 1912, the town established it's governing body as a Borough.Throughout the years, Bally has been known as an area rich in heritage where the people of different religious backgrounds live and work together in harmony. It is home to artists, blue-collar workers, high tech industries and agriculture.Today, Bally's population is 1062. There are numerous business and industry in town, some of which are known internationally. Among the largest Industries are: Bally Ribbon Mills, Bally Butcher Block and Great American Knitting Mi