Johnson and a dozen other followers of Maharishi purchased 50 farms totaling 3,000 acres (12 km²), some 1,200 of which were designated for the town itself. They laid out development in 10 circles ringing about one square mile, and paved roads, installed utilities from sewage to internet, and constructed buildings including two hotels, houses, office buildings, and a Vedic observatory with ancient astronomical instruments to orient the town within the cosmos. Eventually a double golden dome in the center of the layout will serve as a venue for yogic flying, similar to a facility already in use at the nearby university because residents believe that group practice of this technique "will create coherence for the whole country". Financial and infrastructure needs led Maharishi Vedic City to seek formal approval as a city from the state, and after petitioning the Iowa City Development Board and holding a referendum, it was incorporated as Iowa's newest city on July 21, 2001—the first in Iowa since 1982. The group expects to have a population of over 1,000 by 2010, chiefly made up of meditators already living in Fairfield.
Sanskrit has been named the city's "ideal language," although other languages are used. In November 2001, the city's name was expanded to Maharishi Vedic City. In November 2002, the city council passed an ordinance banning the sale of non-organic food. The city council voted to ban the use of synthetic pesticides and fertilizers within the city limits in April 2005, becoming the first all-organic city in the country. As of 2003, the city began offering tours to the public.