Treating both many-body polarization and dispersion interactions is now recognized as a key element in achieving the level of atomistic modeling required to reveal novel physics in complex systems. The quantum Drude oscillator (QDO), a Gaussian-based, coarse grained electronic structure model, captures both many-body polarization and dispersion and has linear scale computational complexity with system size, hence it is a leading candidate next-generation simulation method. Here, we investigate the extent to which the QDO treatment reproduces the desired long-range atomic and molecular properties. We present closed form expressions for leading order polarizabilities and dispersion coefficients and derive invariant (parameter-free) scaling relationships among multipole polarizability and many-body dispersion coefficients that arise due to the Gaussian nature of the model. We show that these "combining rules" hold to within a few percent for noble gas atoms, alkali metals, and simple (first-row hydride) molecules such as water; this is consistent with the surprising success that models with underlying Gaussian statistics often exhibit in physics. We present a diagrammatic Jastrow-type perturbation theory tailored to the QDO model that serves to illustrate the rich types of responses that the QDO approach engenders. QDO models for neon, argon, krypton, and xenon, designed to reproduce gas phase properties, are constructed and their condensed phase properties explored via linear scale diffusion Monte Carlo (DMC) and path integral molecular dynamics (PIMD) simulations. Good agreement with experimental data for structure, cohesive energy, and bulk modulus is found, demonstrating a degree of transferability that cannot be achieved using current empirical models or fully ab initio descriptions. © 2013 American Physical Society.