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Mountain City, nestled in the Blue Ridge Mountains of Rabun County, developed later than many Georgia towns due to its rugged terrain. Originally part of Cherokee territory, the land was used for hunting, farming, and trading before the forced removal of the Cherokee in the 1830s. By the late 19th century, settlers discovered the area's potential not just for farming but for tourism, as the cool climate and mountain vistas offered a natural retreat for those escaping summer heat in Atlanta and beyond. The founding of Mountain City was directly tied to the extension of the Tallulah Falls Railway, which brought travelers into Rabun County.

In its early economy, Mountain City balanced small-scale agriculture with tourism. Families planted corn, apples, and garden crops in the fertile mountain valleys, while livestock thrived in the highland pastures. However, it was the hospitality industry that distinguished Mountain City. Hotels, boarding houses, and summer camps were established to serve visitors drawn by the fresh mountain air. By the early 20th century, the town gained a reputation as a summer resort, and wealthy families built seasonal homes, influencing both the economy and cultural life.

Infrastructure was crucial in shaping Mountain City's history. The Tallulah Falls Railway, completed through Rabun County in the early 1900s, provided a reliable connection between Atlanta and the mountain towns. Later, U.S. Highway 441 expanded access and turned Mountain City into a convenient stop for travelers exploring the scenic northeast Georgia mountains. These routes not only allowed visitors to reach the area more easily but also supported local businesses, cementing the town's place as a hub of tourism in Rabun County.

The community of Mountain City grew around its reputation as both a welcoming summer destination and a close-knit town. Seasonal festivals, church gatherings, and community events reinforced its identity. The town became home to both long-term residents and families who maintained summer homes. Institutions such as the Foxfire Museum—dedicated to preserving Appalachian culture—helped highlight the traditions of the region and attracted even more visitors with an interest in history and heritage.

Today, Mountain City continues to thrive as a small but charming town in Rabun County. Its appeal lies in its mountain setting, mild climate, and proximity to outdoor recreation like hiking, waterfalls, and lakes. The town has retained its identity as a mix of residential community and tourist haven. With a blend of year-round residents, seasonal visitors, and outdoor enthusiasts, Mountain City represents the beauty and cultural richness of Georgia's highlands.