The city was the only Swedish city founded and chartered in the 18th century. Östersund was founded in order to create a trade monopoly over Jämtland whose inhabitants' lucrative trade annoyed the Swedish crown. The intention was to persuade the local farmers to deliver merchandise to middlemen in Östersund, but the population opposed this economic philosophy, and Östersund long remained small. It took until the end of the 19th century for Östersund to truly become a city, after the arrival of the railroad and the economic liberalization of that time.
Östersund is situated in inland Scandinavia and connected to Sundsvall in the east at the Swedish coast, and Trondheim in the west at the shores of the Norwegian sea. Östersund is located in the middle of Scandinavia, in the middle of Sweden, in the middle of Jämtland County and in the middle of Östersund Municipality. As the most centrally located city in Sweden, the city credits itself as the centre of Sweden.