Teirm was encircled by a white wall a hundred feet tall and thirty feet thick. There were two main gates: one on the western side of the city, facing the sea, the other on the southern side, opening to the road. In the northeast sector of the city was a towering citadel, which housed the lighthouse. The city's buildings grew progressively taller from the outside in: the tallest buildings were near the citadel. As explained by Brom, the city was laid out in such a way that pirate attacks could be easily repelled. It is also stated by Jeod that the layout of the city also makes it easy for thieves to run along the rooftops. This measure was only added after Teirm was almost destroyed by one such attack. Jeod describes Teirm as a "small ocean town" which is pretty when it's not raining.
Teirm had previously been burned to the ground by pirate attacks. After the attacks subsided, the government decided to build Teirm in a tiered formation. Teirm also had a long history of being attacked by Urgals. After the Varden took Urû'baen and set off to capture Teirm, they attempted to negotiate with them first. Lord Risthart demanded Teirm to become an independent City-State. After swearing loyalty to Nasuada, she agreed as well.
Brom and Eragon traveled to Teirm while hunting for the Ra'zac, hoping to find documentation of the sale of Seithr oil in Teirm's record rooms. It was also the home of Angela, the herbalist who read Eragon's fortune and Solembum the werecat. Later, Roran and the villagers from Carvahall came to Teirm seeking passage on a ship to Surda. They stole the Dragon Wing with the help of Jeod and other merchants who supported the Varden.
After the fall of Galbatorix, Teirm seems to show similarities to the Imperial Remnant from Star Wars who like Teirm still remained loyal to the previously existing imperial authority it lived under (For the Imperial remnant, that was the Galactic Empire and its later version the Dark Empire under Palpatine (Darth Sidious). While for Teirm that was the Broddring Empire under Galbatorix.).