It can sometimes be confusing for some people to know the difference between a village and a town because they seem to be the same in the beginning. When you say village, this means that the size of the place is rather small.
There are instances when a village would only have residential places and they would need to go out of the village if they would need other items for their basic needs. A town, on the other hand, is considered to be more advanced.
It will have some of the basic amenities that people may need so that they can live comfortably. There will also be some shops that may also be owned by those who live nearby. Take note that a town is still smaller than a city.