What is true about branchial cyst?
BRANCHIAL CYST

It arises from the remnants of second branchial cleft. Normally, 2nd, 3rd, 4th clefts disappear to form a smooth neck. Persistent 2nd cleft is called as cervical sinus (of His) which eventually gets sequestered to form branchial cyst. 
Epithelial infusion within lymph node may be the other cause as branchial cyst contains lymphoid tissues in their wall. 
Six branchial arches with five pharyngeal pouches (endoderm lining) inside and five pharyngeal clefts (ectoderm lining) outside are present. 

Treatment

Excision under GA. 
Cyst is in relation to carotids, hypoglossal nerve, glossopharyngeal nerve, spinal accessory nerve,  posterior belly of digastric and pharyngeal wall. Medially it is close to the posterior pillar of tonsils. During dissection, all these structures should be taken care of. 

Note:

Sclerotherapy with OK-432 (picibanil) has been effective, often done under US guidance. 
In fish, branchial clefts develop into gills.

Key Concept:
It arises from the remnants of second branchial cleft. Normally, 2nd, 3rd, 4th clefts disappear to form a smooth neck. Persistent 2nd cleft is called as cervical sinus (of His) which eventually gets sequestered to form branchial cyst. 
Reference: SRB's Manual of Surgery, 5th ed, page no 431
Present in anterior triangle of neck
Cauterization is done
Arises from 2nd cleft
Present in lower 3rd of neck