FROM:
http://www.japan-guide.com/forum/queread…
The difference is in population, a city is bigger than a town obviously and probably has 100,000 people ar more (not sure of the exact requirements to be a city) but it's a bit arbitrary as some really rural- looking areas in some prefectures- Saitama is a good example- are classed as shi or cities, even though when you get off the train at that station you can hardly see anything but rice fields.
Japanese urban sprawl is so extensive that there is often no break between one city and the next.
FROM:
http://geography.about.com/library/faq/b…
What is the difference between a city and a town?
In the United States, an incorporated city is a legally defined government entity, with powers delegated by the state and county and created and approved by the voters of the city. It can provide local government services to its citizens.
In most places in the U.S. a town, village, community, or neighborhood is simply an unincorporated community with no governmental powers. Usually, county governments provide services to these unincorporated communities. Some states do have official designations of "towns" that include limited powers.
Generally in the urban heirarchy, villages are smaller than towns and towns are smaller than cities but each country has its own definition of a city and an urban area.