There's a nice thread around here somewhere that analyzes the settlement pattern around, I think, Herefordshire in England.

There was a bit left out of the above analysis regarding feudal settlement patterns, and that's the manorial system. Often, towns would grow up in service to a feudal lord's estate if the lord permitted it. A city, as a self-governing unit, required a charter from an authority capable of granting freemen the right to settle, typically the crown. Cities are full of middle-class professionals, who as a class were a threat to the aristocracy. Therefore, cities were somewhat rarer through most of the middle ages than those small town networks. As we enter the high middle ages, the middle class rises to prominence, more cities arise, and the existing cities grow. We also see a corresponding weakening of the monarchy, at least in England and France. I am less familiar with the history of other parts of Europe.