The City of Athens, TN was first incorporated on February 25,1870 according to the 1869-1870 ACTS OF TENNESSEE chapter 69 section 39. The City unincorporated sometime between 1870 and 1890 and then reincorporated in 1891. In 1903 the city again unincorporated and reincorporated. It is not known exactly why or when Athens unincorporated the first time but the book TENNESSEE: A HISTORY by Robert Corlew gives one example of why some cities in Tennessee did unincorporated. In the 1870's there was a movement to curtail the sale and consumption of alcoholic beverages. In 1877, the "Four Mile Law" was enacted. The law forbid retail liquor sales within four miles of any chartered school outside an incorporated town. The author states, "local community leaders who wanted to abolish their saloons simply surrendered their municipal status and obtained chartered schools".

Chapter 70 of the 1891 ACTS OF TENNESSEE has the title "An act to incorporate the city of Athens in the county of McMinn, and the State of Tennessee, and to provide for the election of officers thereof and prescribe their duties, and for other purposes". It was passed by the legislature on March 20, 1891, signed by Governor John P. Buchanan on March 25, 1891 and became effective "from and after its passage…" In 1903, the city of Athens unincorporated for the second time; the following day, however, the city incorporated again. Quite a number of communities in Tennessee followed this same procedure in 1903. Chapter 356 of the ACTS OF TENNESSEE called for the levy of a special tax on communities that had incorporated, but did not have a provision in place in their charter for the purpose of meeting or paying off existing indebtedness. The cities unincorporated, then incorporated themselves the following day with the necessary provisions in place to avoid the tax. Athens was unincorporated for one hour during 1903. The unincorporation became effective at 12 o'clock p.m. June 30, 1903 and the reincorporation became effective "after the hour of one o'clock a.m. on the first day of July, 1903." Governor James B. Frazier signed both pieces of legislation.

The City operates under the “Council-Manager” form of government as authorized under Chapter 455 of the Private Acts of 1953. The council under the council-manager plan thoroughly dominates the government establishment and enjoys all of the importance and responsibilities of a board of directors. In addition to determining the policies of the city government, the council appoints and directs the city manager.

The council has exclusive responsibility for policy making, the most important aspect of local government. The chief duty of the city manager is administration. The city council is responsible for making certain that the manager administers the affairs of the city in a capable manner, while the manager must make recommendations to the council on municipal policies. One of the unique aspects of this form of government is the fact that neither the council nor the members thereof are allowed to give any orders to any subordinate of the Manager, either publicly or privately, directly or indirectly.

The people elect the city council. In Athens a non-partisan municipal election is held in the City on the first Tuesday following the first Monday in November of each even-numbered year. The Council is elected to staggered four year terms or until their successors are elected and qualified. Council terms are staggered as follows: 2000, two seats; 2002, three seats; 2004, two seats; 2006, three seats; and so on. The Mayor and Vice Mayor are chosen by the Council at their first meeting of the Council after a general city election.

Any qualified voter of the city who resides in the city is eligible for election to the Office of Councilmember.