"Man, Chilltown, I used to hear that when I growing up," said Williams. "It started right up here on the Hill." "The Hill" Williams was referring to is a section of the city where the land rises, which one notices when traveling from downtown Jersey City into the Bergen-Lafayette section. Williams called over a friend who was hanging around the supermarket, who goes by the name of Trues.
"That name Chilltown, they call Jersey City that because you come to JC and you could chill out." said Trues. "When I grew up here, there was a different mentality."
However, Trues couldn't elaborate because he had to run off and "make some money."

Why Do People Call Jersey City 'Chilltown'? by Ricardo Kaulessar in The Jersey City Reporter.