Chelsea, Michigan. Chelsea is a city in Washtenaw County in the U.S. state of Michigan. The population was 4,944 at the 2010 census. In March 2004 by a 995-226 vote, residents approved a change in municipal status from a village into a city. Residents no longer pay property taxes to adjacent Lima and Sylvan townships as they had under the village government. The city provides all services formerly provided by both village and township governments.