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In the early 20th century, the area now known as Wilton Manors was known as Colohatchee. A train stop along the Florida East Coast Railroad near the current NE 24th Street shared that name. The name Wilton Manors was coined in 1925 by Ned Willingham, a Georgia transplant and land developer. Wilton Manors was incorporated in 1947. The city is home to a sizable LGBT population and has become a destination for LGBT tourists, who frequent its many nightclubs and gay-owned businesses along the main street, Wilton Drive; the 2010 U.S.

Census reported that it is second only to Provincetown, Massachusetts in the proportion (15%) of gay couples relative to the total population (couples as reported to the U.S. Census). It contains a large Pride Center, the World AIDS Museum and Educational Center, and a branch of the Stonewall National Museum & Archives, whose main facility is in neighboring Fort Lauderdale.

A city web page highlights LGBT+ life in Wilton Manors. As of the November 2018 elections, Wilton Manors became the first city in Florida and only the second city in the United States to have an all-LGBT+ governing body.Since the late 1990s, the Wilton Drive main street corridor has undergone an economic transformation.

Formerly a sleepy street lined with small retail shops, Wilton Drive is now the city's arts and entertainment district, home to numerous restaurants, bars, shops, condos and rental developments that have blossomed over the last decade. Many of the businesses in the arts and entertainment district are LGBT-owned and/or operated, and "The Drive" has become a local, regional, and national destination for LGBT+ tourism.

In late 2018, construction began on a "Complete Streets" project that will see wider sidewalks, on-street parking, buffered bike lines, and the reduction of vehicular lanes from four to two. Construction of the roadway portion of the project is projected to be completed in late 2019, followed by the landscaping portion of the project. Another example of the economic revitalization in Wilton Manors is the Highland Estates neighborhood, bordered by NE 26th Street on the south, Dixie Highway on the east, the North Fork of the Middle River on the north, and NE 6th Avenue on the west, was significantly transformed in the decade from 1995 to 2005 from a blighted area to an upscale neighborhood with multiple new modern townhouse developments.

Citywide real estate prices increased with, and even ahead of, the national trend in the years of the expansion of the housing bubble (2000–2007). In 2007, the city's taxable property values had grown to $1.26 billion, according to the Broward County Property Appraiser's office. Again following the national trend as the housing bubble burst, Wilton Manors real property taxable values fell 36% from 2007 through 2011.

An upward trend in values resumed in 2012 and has continued through the present, with Wilton Manors consistently ranking in the top tier of cities in Broward County with the highest increases in taxable property values. According to the Broward County Property Appraiser, the city's 2019 taxable values are approximately $1.48 billion and total assessed market values are just over $2.22 billion.Wilton Manors is home to several recreational facilities, the largest of which are Hagen Park, Richardson Historic Park and Nature Preserve, and Island City Park Preserve.

Other Wilton Manors parks include Donn Eisele Park, Snook Creek Park and Boat Ramp, and Colohatchee Park, a 9.3 acres (38,000 m2) recreational facility complete with a boardwalk for nature observation, a dog park, and a boat ramp for watercraft entry. In addition, there are several pocket parks throughout the city.

Another major city park is Mickel Field, which was traditionally a busy hub for local baseball and softball leagues. At the request of the surrounding neighborhood residents, Mickel Field underwent a significant renovation and re-opened in Summer 2015 with new walking trails, fitness station, picnic and performance pavilion, and other new facilities more in tune with the needs of current residents.

In 2019, a significant renovation was completed at Colohatchee Park.On June 19, 2021, at the start of the Stonewall Pride Parade in Wilton Manors, a member of the Fort Lauderdale Gay Men's Chorus lost control of the truck he was driving, which was to be a part of the parade, and drove into other members of his group, killing 75-year-old James Fahy and injuring 2 others, one of whom was put into critical condition, before going on to strike a nearby garden store.

The driver, identified as 77-year-old Fred Johnson Jr., narrowly missed U.S. Representative Debbie Wasserman Schultz, who was seated in a convertible at the time of the accident. The accident caused the parade to be canceled.