During 1924, the Town was named after an executive with the then Pacific Mills.

In 1954, the Town was incorporated after M. Lowenstein purchased the mills and decided not to provide anymore services for the town.

Since March 1954, Lyman has operated under a mayor- council form of government. The Town Council is the legislative branch, and includes six members. The Mayor is the presiding officer and is elected for a four year term, while the Council members are elected at-large on a non-partisan basis serving staggered four year terms.

The Mayor serves as the Town's Chief Executive Officer, and is responsible for carrying out the policies and ordinances enacted by Council. The Mayor administers the daily operations and programs for the Town through the appointments of department managers and staff.