The name of the town testifies to the origin of this larger settlement in the alpine valley.  In  Železniki, the iron ore from Jelovica was smelted for many centuries. From the remote valley a powerful stream used to transport the raw metal to the blacksmith in other places as well. The iron industry disappeared from Železniki a long time ago. Only the old blast furnace and a smaller museum keep its memory alive. It is possible to see what Železniki looked like in the past from models in the local museum collection.

The shell of the old blast furnace, built around 1860, is an important officially recognised technical monument. The building with its visible lower part, with a fireplace, a pyramid nucleus and a four-sided chimney, is the oldest Slovenian blast furnace. Before the ironworks were moved to Jesenice, the workshops and subsidiary areas of the ironworks as well as other devices run by water used to stand on the square, which today is empty.