As a person who writes a mapping app and also some simulation software like my GeoTerSys which stands for Geological Terrain Simulation I have some experience in that area. I can see Gamerprinters point of view in that at present there does not seem to be any app which will make pseudo random terrain in which all of the features of it are plausible to reality. The Turing test for A.I. says that if its not possible to tell whether its real or computer generated then its intelligent.

Terrain is a physical process and as such it ought to be possible to model with a simulation if you include and process enough of the physical processes to a degree where it represents reality. It ought to be possible and maybe there are some research units running something like this on big mainframes but I have never seen one and I am pretty confident that there does not exist one for a home computer.

My simulation handles some processes and to some degree of accuracy to the real world but not enough to make every result plausible. Some more apps make even more random terrain or have pretty good generation for certain types of terrain and not for others. All of them tho dont do it to a level of detail that is sufficient so as not to be able to tell its computer generated (if you know what your looking for).

Community and town placement are a human decision thing but I would argue that for one person it could be based on quite bizarre decision making but for many people like a village up to city then its based on processes that can be modeled. Usually by maximizing the availability and efficiency of natural resources. I have wrote my simulation and posted about that on this forum and showed that its a very complex task to simulate the workings to a degree that are plausibly real.

Now people are good at this kind of thing so G.P is right in that in the absence of these apps a person can usually reason out where towns, villages and terrain might be located. My person feeling is that at the mo this is the best route but in time it ought to be possible to write an app that does this better than a person. For example, we have the ongoing issues with river placement as that is a simple enough rule to burn into computer code that a computer simulation usually does better than a person.

So it depends on the kind of terrain you want, the kind of villages and towns you need and crucially, the users experience and expectations about the map. Since Tolkiens books are the most successful fantasy books ever written and his map was extremely crude then for him it didn't make much odds about its plausibility and put in the mountains, forests and rivers in such a way as to promote the story that he wished to tell. And that's something that is unlikely to ever be burnt into computer code.

So is there an app to make random terrain - yes. Will it stand up to the requirements that it fits into a book story - maybe. Will it stand up to experienced scrutiny - almost certainly not.