The Town of Colchester is in the southwest part of the county.
According to the United States Census Bureau, the town has a total area of 142.2 square miles (368.3 km²), of which, 137.4 square miles (355.9 km²) of it is land and 4.8 square miles (12.4 km²) of it (3.35%) is water.
There were 837 households out of which 24.3% had children under the age of 18 living with them, 54.2% were married couples living together, 7.3% had a female householder with no husband present, and 34.6% were non-families. 29.6% of all households were made up of individuals and 15.8% had someone living alone who was 65 years of age or older. The average household size was 2.32 and the average family size was 2.86.
In the town the population was spread out with 21.0% under the age of 18, 6.1% from 18 to 24, 23.5% from 25 to 44, 26.5% from 45 to 64, and 22.9% who were 65 years of age or older. The median age was 45 years. For every 100 females there were 93.6 males. For every 100 females age 18 and over, there were 92.9 males.
The median income for a household in the town was $32,147, and the median income for a family was $37,895. Males had a median income of $27,143 versus $20,694 for females. The per capita income for the town was $15,636. About 8.5% of families and 12.7% of the population were below the poverty line, including 22.2% of those under age 18 and 7.8% of those age 65 or over.