Reply #138: It's not the existence of rich people that makes a settlement a town.

[Rhythm and Blue]

It would be the existence of organized, permanent trade, a larger population (this is often subjective) and often a higher degree of public infrastructure.

I'll admit that some people use the term "village" as shorthand for "small settlement in a developing nation." However, that seems to me to be more a result of a handy generalization--in the developing world, villages are the most common form of human settlement outside cities, whereas in America towns are. This cuts both ways, though--while a few towns may be erroneously "downgraded" to villages in the name of convenience, many hamlets are in turn erroneously "upgraded" to villages as well.