The land was originally named "Boyle" after Richard Boyle, Earl of Burlington, when the land was granted by Colonial Governor Benning Wentworth in 1752, but Native American hostilities prevented settlement. When the grant lapsed, the town was rechartered in 1763 as "Gilsum," supposedly combining the surnames of its two major families, Gilbert and Sumner. It would be incorporated in 1787. Lucy Mack, the mother of the Latter Day Saint movement founder Joseph Smith, was born in Gilsum in 1775. The town contains the Stone Arch Bridge, completed in 1863 with the highest vault (36 feet, 6 inches) of any mortarless bridge in New Hampshire. In 1989, it was added to the National Register.
Gilsum used to be a center for the mining of mica and feldspar. High-quality crystals, especially beryl, tourmaline, and quartz, can also be found. The Ashuelot River once provided water power for woolen mills. Today, Gilsum is headquarters to the W.S. Badger Company, makers of "balms, potions and natural remedies."
As of the census of 2000, there were 777 people, 310 households, and 220 families residing in the town. The population density was 46.6 people per square mile (18.0/km²). There were 343 housing units at an average density of 20.6/sq mi (7.9/km²). The racial makeup of the town was 98.46% White, 0.39% Native American, 0.13% Asian, and 1.03% from two or more races. Hispanic or Latino of any race were 0.51% of the population.
There were 310 households out of which 26.5% had children under the age of 18 living with them, 58.7% were married couples living together, 8.7% had a female householder with no husband present, and 29.0% were non-families. 23.9% of all households were made up of individuals and 6.5% had someone living alone who was 65 years of age or older. The average household size was 2.48 and the average family size was 2.90.
In the town the population was spread out with 22.3% under the age of 18, 5.0% from 18 to 24, 30.0% from 25 to 44, 31.9% from 45 to 64, and 10.8% who were 65 years of age or older. The median age was 41 years. For every 100 females there were 98.2 males. For every 100 females age 18 and over, there were 104.1 males.
The median income for a household in the town was $43,359, and the median income for a family was $50,469. Males had a median income of $35,150 versus $24,205 for females. The per capita income for the town was $20,955. About 1.9% of families and 7.0% of the population were below the poverty line, including 1.3% of those under age 18 and 13.7% of those age 65 or over.