Shiloach has biblical roots and is the name applied to the waters of the Gihon spring in Isaiah 8:6. The "pool of Shelah" mentioned in Nehemiah 3:15 as, "lying by the king's garden" refers to the pool formed by the overflow of water in Hezekiah's tunnel, which led from the Gihon spring to the city. Archeological researchers have shown that this pool actually antedated Hezekiah's tunnel. An older open channel, constructed during the reign of Solomon or earlier, carried water from the Gihon along the eastern slope of the city of David in order to irrigate the king's garden, in the kidron, valley. As such, it served as a landmark in Josephus' descriptions of Jerusalem during the siege by Titus, and marked the boundaries between the sections defended by John of Gischala and Simeon Bar-Giora.
Talmudic sources refer several times to Shiloach, and according to John 9:7, Jesus sent a blind man to wash his eyes in the "pool of Shiloach," and he was healed. From the Middle Ages onward, the name Shiloach referred to the village on the eastern slope of the Kidron Valley. The village was a suburb of Jerusalem, and the inhabitants worked the fields on the hill of Ophel. In 1884, Jews from Yemen established themselves in part of the village, but were forced to abandon their homes due to Arab riots in 1936. In 1967, after the Six Day War, Shiloach was incorporated into the Jerusalem municipal area.
Sources: Encyclopedia Judaica