Other villages in the municipality include Ausland, Eikeland, Fiane, Gryting, Østerholt, Rød, Sundebru, and Vestøl.

The last element of the name is the plural form of staðr which means "place", "abode", or "town".

The official blazon is "Gules, three knives argent in fess palewise points to the base" (Norwegian: På raud grunn tre opprette sølv knivar).

The knives have a tincture of argent which means it is commonly colored white, but if it is made out of metal, then silver is used.

Until about 1650, the prestegjeld of Gjerstad (the precursor to today's municipality) was named Vissedal (from vidr-ser-dalr meaning "wood-sea-dale"), a very proper description of the area.

Agriculture has long been important, and until only decades ago the more marginal outfields in Upper Gjerstad were still utilized.

Forestry also provided an important historic economic contribution, and logs were driven on rivers and streams in the municipality.

The municipal council (Kommunestyre) of Gjerstad is made up of 17 representatives that are elected to four year terms.