Powderly is a home rule-class city in Muhlenberg County, Kentucky, in the United States. The population was 788 as of the 2020 census. The ci…Powderly is a home rule-class city in Muhlenberg County, Kentucky, in the United States. The population was 788 as of the 2020 census. The city developed around a coal mine opened by the Cooperative Coal Company in 1887. The community was named for Terence Powderly, an early labor leader, when the post office was established the next year.