[2] Danbury was first settled c. 1771 as a part of Alexandria, but mountainous terrain separated it from the rest of the town.

Farmers found the surface mostly hilly, but with some good intervales suitable for agriculture.

The northeast corner of the town drains east to Newfound Lake, which flows into the Pemigewasset River.

The highest point in Danbury is the summit of Tinkham Hill, at 2,320 feet (710 m) above sea level, in the northern part of town.

Ragged Mountain is a prominent mountain with multiple summits which occupies the southern portion of town and has a ski area of the same name; the elevation of the Danbury summit of Ragged is 2,225 ft (678 m) above sea level.

Access to the Ridge Trail from the SRK Greenway is on the SRKG 6.1 mile trail section 9, either from trailhead parking on New Canada Road in Wilmot from the northwest or from Proctor Academy's trailhead parking in Andover from the southeast.

Danbury is the northernmost town in Merrimack County and lies within the Dartmouth-Lake Sunapee Region.