Towns are advanced settlements in the World built by Humans/Elves/Dwarves/Overlord
There are several Towns of note in the game.
Spree the first town encountered by the third overlord, it is automatically put under the overlord's control after he kills Melvin UnderBelly. You can ransack the town and kill the peasants (which unlocks 'Suppressor of Spree' Title).
Heaven's Peak a city built in the swamps, it is first threatened by a zombie plague which has nearly wiped out the population. After killing Sir William the Black it comes under control of the overlord, although zombies wander the canals under Angelis Keep in small numbers and civilians are very scarce. Civilians are mostly concentrated near the city's exit.