On 10/8/07, I wrote this letter to an academic interested in starting a civic wiki for Atlanta, Georgia. The letter may prove a good template for an introduction to ArborWiki.
ArborWiki has been a very low-budget project. It started as a small, nearly empty site, and slowly but surely, people discovered and added to it. The software that runs ArborWiki (the same software that runs Wikipedia) is free, and I volunteer my time. A bunch of site contributors enjoyed the site and then jumped in and volunteered to be administrators, too. Recently, our district library partnered with us to manage the technical aspects of the site. They've also expressed interest in using the site as a collection for the local historians they work with.
In your situation, the costs of creating the site will probably be higher. I had the technical background to install and run the software and create a basic page template. If you want to create particular displays of local information (like a timeline or special exhibit), the software does require some HTML skills. If cost is an issue, perhaps one or a group of your students would be interested in creating a pilot site for class credit.
One challenge has been "gardening" the site. Several contributors and I patrol the list of recent changes to improve pages and erase spam. Our effort is ad-hoc, and only somewhat coordinated. A more official group, with a set of goals, could easily guide a site in the desired direction. (but of course, all the structure on ArborWiki has been generated by citizens, many of them anonymous, and I believe that's what has made it a useful community resource)
There are some specific pages that show the various uses of a civic wiki: After a local figure died recently, contributors collected articles and stories about his life: Shakey Jake
You can track down places to eat:Category:Restaurants
Some are quite playful, like this article on Donuts: Donuts
An upcoming conference is being discussed: ArbCamp
And there are pages about very practical things, like biking: Biking
A large number of articles are short and need improvement: Category:Stubs
As your project progresses, I would be very interested in hearing what you decide to do, and what suggestions you receive from other Wiki developers. And if there's anything I can help with, or more questions I can answer, please feel free to email or call.