For an example on how great a town can be, see Treno from FFIX. Packed with sidequests, hidden treasures and events. I'd mention Alexandria and Lindblum too, but the sidequests of Treno are just awesome!

A well made town doesn't just have one-liner NPC's and shops, that's a crappy town. You should have to do stuff around town to get deeper into the story and progress it.