The guitarist told The Sun that the pop superstar is a "story" and "iconic figure".
Townshend said: "The machinery of making music means more people can do it now. The technology has made it easier to make music without being profoundly gifted.
"What Lady Gaga has done is created an iconic figure who is someone we can get inside. She's a story and it's fascinating to watch - she's like a space oddity."
Asked about The Who's performance at the London 2012 Olympics Closing Ceremony, singer Roger Daltrey said: "We were in the dressing room next door to the Spice Girls and listened to them warm up - and singing really well.
"So all those that don't think they can sing - they can. They were a joy."
He added of cyclist, mod and Olympic champion Bradley Wiggins: "He is invited to any of our shows
"I've written and told him that. I'm sure we will meet him - he has a free pass to any show he likes. What an athlete and what a gentleman."
Townshend added of TV music competitions: "You don't listen to TV any more.
"You sit there and spend your whole time shouting, 'What a c**t, he's a c**t, she's a c**t, she's useless, she's great - vote for her'.
"It has created a different way of watching television. Reality TV is about what goes on in the room when you're watching it."
Photo gallery - GaGa's maddest moments so far:
Copyright: Rex Features Ken McKay/TalkbackThames/Rex Features