[Ian0351]

The best answer I can find to defines towns, cities and villages has nothing to do with population (I got this from several googled sourced not worth citing, such as yahoo answers):

A city has a Cathedral
A town has a Church and a Communal Hall
A village or hamlet is a group of houses and a Church

This may not be totally relevant to American settlement hierarchy, especially considering the plethora of denomination for which we have churches... but it is interesting.

I grew up in a town called Maple Valley, WA which incorporated (became a 'city') when I was 16, with a population of approximately 15,000 people. I think village is appropriate for places without government services (police, fire, etc) and rely on the county for such. Towns have their own services, are generally less than 25,000 people (a 'small town' is <10,000) and do not have a democratically elected City Council. Cities have said elected government, services independent from county services... particularly their own jail.