>Americans don't want to be seen as small. In the UK a town needs to have a cathedral, and be pretty big, or get a charter from the Queen, in order to become a city. The contiguous towns of Brighton and Hove, where I live, got such a charter the other year - now we're the city of B & H. It seems that in the US, if it's got an hotel, saloon bar, livery stable, telegraph office and a sherrif it becomes a city! :-)
As Bret Empie explained to me, post office is enough. If you have a ZIP code, you're a town.