[3] It was named after José de Salamanca, a Spanish nobleman and cabinet minister of the mid-19th century.

[3] Salamanca is within the Allegany Indian Reservation of the Seneca Nation of New York (one of the six tribes of the Iroquois Confederacy).

The city population of about 5,900 is about 19% Native American; this does not include Seneca people living in the nearby hamlets of Jimerson Town (one of the two capitals of the nation) and Kill Buck.

What is now known as the city of Salamanca was originally two separate communities, one on Little Valley Creek and the other on Great Valley Creek; the westernmost one of the two was called "Hemlock", a name derived from the numerous hemlock trees throughout the surrounding mountains.

The city also benefited from the then-thriving lumber industry that dominated much of southwestern Cattaraugus County at the turn of the century, as boomtowns along the Allegheny River such as Elko, South Valley and Red House (all much-less populated ghost towns today) all used the railroads to ship their goods upstream.

[7] The majority of the city, with the exception of a northeastern spur along Great Valley Creek, was constructed on the Allegany Indian Reservation held by the Seneca Nation of New York, as established in various treaties.

[8] As arranged by the railroads, the previous leases had nominal payments and covered only the land; improvements (i.e., buildings and houses) were considered to be owned by the non-native citizens.

Numerous people living in the city did not agree on the amount of lease payments or the legitimacy of the Senecas' absolute ownership claim.

Once a Seneca acquires the land, it is taken off the tax rolls; for this reason, the city of Salamanca does not auction-off abandoned properties on the reservation in a property-tax auction, for fear Seneca individuals will buy the land, removing it from the tax rolls.

The city has a council-mayor system, with the mayor elected at-large and five trustees selected from wards, generally numbered from west to east.

Salamanca’s average annual expenditure increases on debt service, general government, transportation, utilities and public safety between 2004-05 and 2009-10 were all in the double digits.

About 1,000 new jobs were created by the casino operation, resulting in a housing shortage in the small town as new workers entered the city.

Under the arrangement with the state, a 25% share of the casino's revenue goes to the city and county, which they can use for needed projects.

The Seneca Nation has made efforts to diversify, establishing a tribal holding company in 2009 and an economic development corporation in 2011.

In 2021, many of the city's vacant buildings and former smoke shops were converted into cannabis dispensaries, leading to a glut of retailers for the recently legalized product.

The Southern Tier Expressway (Interstate 86 and New York State Route 17) passes south of the city.

WQRS (The Goat, historically known as 98 Rocks) carries a classic rock format run by Seven Mountains Media out of Olean; WGGO is an owned and operated station of The Station of the Cross, a regional Catholic radio network, with its nominal studio in Kill Buck.

W288EK (FM 105.5) is also licensed to Salamanca and simulcasts WOLY (Big Oly), another Seven Mountains station out of Olean.

There is no direct television broadcasting in Salamanca; the city is ostensibly part of the Buffalo media market, and local cable and satellite providers carry those stations (as well as some from Erie, Pennsylvania and Toronto, Ontario), but the hilly terrain around the city makes television reception problematic.