The village was named for the Leidy family of whom patriarch Joseph Leidy originally settled in Franconia, Montgomery County circa 1727. Leidytown once had residences, shops, a 3-story inn (Zachariah Leidy, landlord), a cabinet-making factory (operated by Francis Sellers) and a tannery. It was a stagecoach stopover on the Bethlehem to Philadelphia route. The cabinetmaking factory continued operating half-a-century after the Civil War.
Moravians (probably) slept here ... 
The Old Bethlehem Road or King's Road was developed by slow stages. The first section from Germantown Avenue was laid out by the Penns and had penetrated north into the Indian lands before the Penns had title to those regions. In 1732 the road was open to Leidytown and by 1734 was extended and four years later had reached as far as Hellertown, or to the Irish quarry. The great part was an adoption of a Minsi Indian trail, and it was over this that the Moravians are said to have come on their first journey to Hellertown and beyond in the locating of Nazareth.
There is some confusion as to the course of the Old Bethlehem Road. Many are lead to believe that the Bethlehem Pike today is the Bethlehem road of Colonial times. The Old Bethlehem Road was identical in course from Germantown Avenue in Philadelphia northward as far as Line Lexington. From here the road passed through Leidytown, Hagersville, Weisel, thence Mountain House, Strawntown, Applebachsville, Pleasant Valley and Hellertown to Bethlehem. It was over this historic road that the first Moravians came. The many notables of the period of the Revolution traveled over this enlarged trail that to this day has changed but little along many of the unique stretches. Strawntown today portrays an atmosphere of that period when the plodding "Stage wagon" of George Kline wended its way faithfully to and from Philadelphia. It was at this place in one of the surviving stone buildings, once an inn, that subscription was initiated in 1805 to raise funds for a turnpike. At the same time a subscription was opened at Quakertown and was effectively sponsored so that the New Bethlehem Road was given its course as today. Thus, for a century the historic section of the pioneer road from Line Lexington to Hellertown has been a neglected way. The same eternal boulders are along the road side, the same twists and turns exist while ever and anon there is to be found some of the surviving milestones. It is to be hoped that some day there will be a modern face lifting balm applied to the grand old road and that it may be given its place in the sun in days to come.
The Moravians were persistent in securing roads. In 1742 a traveler crossed the Delaware on Martin's ferry boat and recounted the difficulties that beset him and his mount in negotiating the windings of an Indian trail that led to Bethlehem. Martin petitioned the Court of Bucks County in 1745 but had to wait for some ten years before a road was laid out from where Easton stands, to Bethlehem.