The Collaborative International Dictionary of English v.0.48:

Observatory \Ob*serv"a*to*ry\, n.; pl. Observatories. [Cf. F.
   observatoire.]
   1. A place or building for making observations on the
      heavenly bodies.
      [1913 Webster]

            The new observatory in Greenwich Park. --Evelyn.
      [1913 Webster]

   2. A building fitted with instruments for making systematic
      observations of any particular class or series of natural
      phenomena.
      [1913 Webster]

   3. A place, as an elevated chamber, from which a view may be
      observed or commanded.
      [1913 Webster]

   4. (Mil.) A lookout on a flank of a battery whence an officer
      can note the range and effect of the fire; usually
      referred to as an observation post. --Farrow.
      [1913 Webster +PJC]

WordNet (r) 3.0 (2006):

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,
       observatory]

Moby Thesaurus II by Grady Ward, 1.0:

46 Moby Thesaurus words for "observatory":
   Cassegrainian telescope, Newtonian telescope, OAO, OSO,
   Texas tower, astronomical observatory, astronomical telescope,
   beacon, belvedere, bleachers, bridge, coelostat, conning tower,
   coronagraph, coronograph, gallery, gazebo, grandstand, heliostat,
   lighthouse, lookout, loophole, observation post, orrery, outlook,
   overlook, peanut gallery, peephole, pharos, planetarium,
   radar telescope, radio observatory, radio telescope, reflector,
   refractor, ringside, ringside seat, sighthole, spectrograph,
   spectroheliograph, spectrohelioscope, spectroscope, telescope,
   top gallery, tower, watchtower



The Devil's Dictionary (1881-1906):

OBSERVATORY, n.  A place where astronomers conjecture away the guesses
of their predecessors.