Clay City is a home rule-class city in Powell County, Kentucky, United States. The population was 1,077 at the 2010 census. History The first European settlement in the vicinity of present-day Clay City was in 1786, by Stephen Collins and his brother, after their discovery of pyrite deposits. Shortly afterwards, the brothers set up the first iron forge west of the Allegheny Mountains and established Collins Forge. The Collins brother sold their forge to Clark and Smith in 1805, the forerunner company of the Red River Iron Works. For much of the 19th century, the settlement was known by the same name as the forge. By the 1880s, the post office was moved across the river and was renamed Waltersville for the local family carrying the same surname. By 1883 the settlement was named Clay City, possibly for the local clay deposits. It is believed that the name was officially changed from Waltersville on August 13, 1883, when the post office was renamed Clay City. The settlement was incorporated as a fifth-class city on April 19, 1890. Geography Clay City is located at (37.863203, -83.928281). According to the United States Census Bureau, the city has a total area of 1.1 square miles (2.8 km2), all land. The city is located in a low-lying area in the Red River Valley. With such proximity to the Red River, it floods quite frequently when a large storm/thunderstorm moves through the area. Demographics As of the census of 2000, there were 1,303 people, 543 households, and 367 families residing in the city. The population density was . There were 588 housing units at an average density of . The racial makeup of the city was 99.08% White, 0.23% African American, 0.15% Native American, and 0.54% from two or more races. Hispanic or Latino of any race were 0.84% of the population. There were 543 households, out of which 33.0% had children under the age of 18 living with them, 42.5% were married couples living together, 18.6% had a female householder with no husband present, and 32.4% were non-families. 29.5% of all households were made up of individuals, and 10.3% had someone living alone who was 65 years of age or older. The average household size was 2.40 and the average family size was 2.95. In the city, the population was spread out, with 27.1% under the age of 18, 8.7% from 18 to 24,