Used a very poor scaling based on the definition of settlement sizes and the amount of members on the server.
House = 1
Hamlet = 2-4 people
Village =5-13
Town = 14-25
City = 26+ (In theory 200+ members)
For example the staff castle would be a village. The Spawn would be a City with 40+ unique owners.
Toast Town would indeed be a town.
I believe it works well.
Scaling seems about right to me.