According to the United States Census Bureau, the CDP has a total area of 39.0 square miles (101.1 km²), of which, 39.0 square miles (101.1 km²) of it is land and 0.03% is water.
The town was named after Palermo, Sicily due to its excellent climate for growing olives. The first post office was established in 1888.
As of the census of 2000, there were 5,720 people, 1,989 households, and 1,501 families residing in the CDP. The population density was 146.5 people per square mile (56.6/km²). There were 2,165 housing units at an average density of 55.5/sq mi (21.4/km²). The racial makeup of the CDP was 77.99% White, 0.58% Black or African American, 5.89% Native American, 2.40% Asian, 0.12% Pacific Islander, 7.87% from other races, and 5.16% from two or more races. 15.59% of the population were Hispanic or Latino of any race.
There were 1,989 households out of which 31.7% had children under the age of 18 living with them, 57.2% were married couples living together, 11.8% had a female householder with no husband present, and 24.5% were non-families. 19.4% of all households were made up of individuals and 9.0% had someone living alone who was 65 years of age or older. The average household size was 2.87 and the average family size was 3.27.
In the CDP the population was spread out with 28.3% under the age of 18, 7.7% from 18 to 24, 22.9% from 25 to 44, 25.3% from 45 to 64, and 15.8% who were 65 years of age or older. The median age was 38 years. For every 100 females there were 104.3 males. For every 100 females age 18 and over, there were 99.6 males.
The median income for a household in the CDP was $30,588, and the median income for a family was $35,250. Males had a median income of $31,135 versus $19,950 for females. The per capita income for the CDP was $15,206. About 19.3% of families and 25.6% of the population were below the poverty line, including 41.2% of those under age 18 and 6.3% of those age 65 or over.