Source : Webster's Revised Unabridged Dictionary (1913)

Observatory \Ob*serv"a*to*ry\, n.; pl. {Observatories}. [Cf. F.
   observatoire.]
   1. A place or building for making observations on the
      heavenly bodies.

            The new observatory in Greenwich Park. --Evelyn.

   2. A building fitted with instruments for making systematic
      observations of any particular class or series of natural
      phenomena.

   3. A place, as an elevated chamber, from which a view may be
      observed or commanded.

   4. (Mil.) A lookout on a flank of a battery whence an officer
      can note the range and effect of the fire. --Farrow.

Source : WordNet®

observatory
     n 1: a building designed and equipped to observe astronomical
          phenomena
     2: a structure commanding a wide view of its surroundings [syn:
         {lookout}, {observation tower}, {lookout station}]