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I had an extremely brief conversation over a pool table in Kilkenny. A young middle-aged man asked me where I'm from. I told him "Oregon," and asked of him the same. He said "Kilkenny."
I told him "It's a nice town."
He said "city."
The distinction is important for several reasons. One is cultural pride, of course. Another is administrative capacity. With designation as a city, the municipality has more control over its own affairs, whereas a town would relegate more of that control to the State.
Then there's the historical perspective. King James I declared Kilkenny a city in 1609. How can you reverse that, as if Kilkenny were no longer a city just because other cities got bigger?