I do treat them as towns or cities in my game, too, but I think they're called "worlds" because there is no umbrella term that accurately describes all of them. I can clearly see the base game worlds and most of the others as towns, and San Myshuno and Del Sol Valley as cities. With Sulani and Mt. Komorebi, however, it would be weird to call them towns because one is clearly an island chain and the other appears more like a country with three towns located in different places on the mountain. And Magnolia Promenade is neither of those things, it's literally just a street...
