Naila is 18 km (11 mi) from the larger city of Hof, on both banks of the Selbitz river.

The name Naila first appeared as "Neulins" (and variations thereof), has its origins most likely in the meaning "Small new settlement".

After a brief episode under Prussian reign (1792–1810), Naila was included into the newly-established Kingdom of Bavaria.

[3] After World War II, the Iron Curtain, just 8 km (5.0 mi) north of Naila, cut off a large part of the market for the local industries.

[3] In 1979, Naila was the landing site of the Strelzyk and Wetzel families' famous homemade hot-air balloon escape from East Germany.