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Leatherface is a fictional character first off. However, Leatherface/Thomas Hewiit was inspired by the famous Wisconsin serial killer named Ed Gein. He never used a chain saw, but did like to put human body parts in his house to decorate.
You can read more about this serial killer:
http://en.wikipedia.org/wiki/Ed_Gein#Popular_culture
http://www.crimelibrary.com/serial_killers/notorious/gein/bill_1.html
http://www.fortunecity.com/roswell/streiber/273/gein_cf.htm

Yeah its not true... ( its based losely on real events)

yeah i have too come to think of it. I think it was in the dallas area or something like that.

While cool on film, chainsaws are a totally impractical weapon for murder, the weight will slow you down if running, the sound makes is impossible to sneak up on someone, and it'd leave way too much evidence. The chainsaw isn't even a good way to cut up a body, it'd make a mess, and you'd possibly asphyxiate if you were not in a well ventilated area.

Ed Gein is the inspiration of Leatherface from the skin wearing standpoint, the chainsaw concept came from Tobe Hooper's visit to a hardware store and deciding that a chainsaw would be a good way to get through a crowd.

Buffalo Bill from The Silence of the Lambs, and possibly Francis Dohlerhyde from Red Dragon are also based upon Ed Gein.

And this is why he is called the Chainsaw King 3nodding

Here, this should help you:

http://www.snopes.com/movies/films/chainsaw.asp