Words continue to be widely used as long as they remain relevant and useful. Since redistricting solely for party advantage, also known as gerrymandering, is still quite the common practice, the word remains with us and will most likely remain for the forseeable future. The word is not as old as the practice it describes, but it does go all the way back to an 1812 newspaper illustration.
The story goes that members of the Democratic-Republican party in the Massechussetts legislature drafted a redistricting proposal which created a winding, snaking district map. Upon seeing this map, either at a dinner party or in the office of a newspaper editor, the creator of the illustration added a mouth, feet, wings, and a tail to it, creating a picture of a dragon-like monster. Someone remarked that it looked like a bit like a salamander, added Gerry's name in front of it, and the term "gerrymander" was born. The resulting illustration was printed in the Boston Gazette in late March, and was later widely distributed to other newspapers favoring the opposition party, the Federalists. It was even reprinted the next year in several Federalist papers, anticipating the upcoming election.
The "Gerry" part of the word refers to the then governor of Massechussetts, Elbridge Gerry, who probably didn't actually have much to do with the original proposal for redistricting. On the other hand, he did sign it, and he stood to gain from it, as he belonged to the party it favored, so the blame was placed squarely on his shoulders.
Interestingly, it's not clear who created the original drawing. Currently, it's fairly widely accepted that the artist was Elkanah Tisdale, an illustrator and engraver who was working in the area. Washington Allston and Gilbert Stewart have also been suggested, though the evidence for them is not as compelling as for Tisdale.
For more information:
The Gerrymander at the Massachussetts Historical Society
The Gerrymander Map at the Cornell University Library digital collection
The Gerrymander and Elbridge Gerry at Tawdry Knickers