My opinion, for what it is worth:
*) we should not be concocting our own norms or definitions or criteria, but only follow those that are in place, from sources of authority
*) even if we were to set up our own definitions, they should be practical and politically tenable. Definitions based on people’s gender are quite unacceptable, these days, for one example.

If we do have to define a “town” for ourselves, even if I do not like the idea at all, important criteria should be the availability of services, such as schools of various levels, hospital, transportation infrastructure, and more such.

My preference would be to only publish what is beyond discussion:

  • this is an inhabited place
  • its name is xxx
  • population=9999 , if possible with a source reference and a date