The area of the present-day town has been settled since Neolithic times. The name Oschatz derives derives from the Sorbian word for abatis. The first written mention was in 1200 as a name "Johannes de Ozzetz", however the association to Oschatz is uncertain. The firs definite mention of the town dates from 1238, as Ozzechz is mentioned in a document from the Markgrave Heinrich III. von Meißen. The oldest document found in the town aarchive is an indulgence letter from Bishop Conrad of Meißen, dated 1246. In 1344 the people's army The Geharnischten certified for the association of towns Oschatz, Torgau and Grimma, and a schoolmaster was employed in 1365. The town received market rights in 1394.
Oschatz lies in the Saxon Lowland and is located on the river Doellnitz, which joins the river Elbe as a left tributary 15 km away near Riesa. Oschatz is situated near the forested regions of the Dahlener Heath as well as the Wermsdorfer Forest and the Collmberg. Neighboring districts include: Liebschützberg, Strehla, Riesa, Stauchitz, Naundorf, Wermsdorf and Dahlen.
The administrative district of the town Oschatz also contains the following 14 townlands:
Thalheim (with Saalhausen und Kreischa)