In the State of New York a village is an incorporated local government and is located within a township. In the case of Hudson Falls it lies within the Town of Kingsbury, which was charted in 1762 by H.M. George III, of the United Kingdom. The town government was organized in the early 1780's. Prior to the name of Hudson Falls the area that was incorporated as a village was called Sandy Hill. The earliest use of the name Sandy Hill can be found in the original Kingsbury minute book, started in 1782. In the annual Town Meeting of 1792 the term Sandy Hill is used to describe where the annual Town Meeting was to be held the following year, 1793.

It wasn't until 1810 that residents of Sandy Hill requested that the state legislature designate the area as the incorporated Village of Sandy Hill and this happened in March, 1810. The population of the village was small in 1810, under three hundred people, including a few slaves. About forty years later the size of the village was extended to the area that now encompasses the village. This addition enlarged the Village of Sandy Hill by two-thirds. Today the Village of Hudson Falls has a population of around eight thousand.