The small town of Nazareth was located within the Roman Province of Galilee that included cities such as Tiberias on Lake Galilee, Hazor and Capernaum. The city itself is just west of Capernaum and not far from Cana. It was built partly in a valley and partly on the slope of a hill. Populated at the time of Jesus by mostly Gentiles, the city is not mentioned in the Old Testament. It was considered of little significance, with a special contempt and distrust placed upon it. This contempt was expressed by Nathanael while Jesus was in the process of calling him to be one of the twelve disciples.
44. On the next day, Jesus desired to go into Galilee; and He found Philip and said to him, "Follow Me." 45. Now Philip was from Bethsaida, the city of Andrew and Peter. 46. Philip found Nathanael and said to him, "We have found Him of Whom Moses wrote in the Law, and also the prophets, Jesus, the son of Joseph; He is from Nazareth."
47. And Nathanael said to him, "Can any good thing come out of Nazareth?" Philip said to him, "Come and see." (John 1:44-47, Holy Bible in Its Original Order - A Faithful Version)
The best explanation of the city's name is that it comes from the word translated 'Branch' in Isaiah 11:1, a passage of scripture that offers prophecies concerning the coming of Jesus (Isaiah 11:1-4).
Joseph and Mary fled to Egypt with baby Jesus in order to avoid the wrath of Herod the Great. When Herod died circa 4 B.C. one of his sons, Archelaus, was made Ethnarch of much of Judea by the Romans. As Jesus' family was traveling back to Palestine Joseph found out that Archelaus (Herod's oldest son who, like his dad, was a harsh ruler) now ruled over Bethlehem. It was decided that the family would live in Joseph's hometown of Nazareth. When Herod died the city and all Galilee were placed under another one of his sons, Antipas, who ruled with less tyranny than brother Archelaus. Jesus lived in the city until about the age of thirty when he moved to Capernaum at the beginning of his ministry.
13. And after leaving Nazareth (at about 30), He (Jesus Christ) came and dwelt in Capernaum, which is on the seaside, on the borders of Zabulon and Nephthalim; (Matthew 4:13)