Drain said:
Wouldn't rich ones migrate to larger cities ...
Many towns have been destroyed during the war; there is are few places that are in much better shape; and last, but not the least, they are a part of this particular Noble House, that has once governed a province, but now has nothing left but this town. (will be explained in the game in more details).
...or at least build villas outside the city?
Not safe. The broken walls aint the best defense, but it's easier for many town people to defend a few breaches, then for a few people to defend a house/villa outside the walls. We will fix a few breaches though.
... which seems large enough to lodge half of the town?
Will be redone. I agree with most comments, it just doesn't fit.
Also an assassins' guild in a settlement with 50-60 people looks strange, to say the least. I know, I'm nitpicking and I agree that gameplay issues are more important, but it would be nice to see logically built town.
The population of this town is much larger than 50-60 people. I can easily make it large enough for you to believe that it has at least 500 people. Would that be fun for you? This town is a representation, not an exact replica. Obviously, it's ridiculous to think that a rich area consists of 3 buildings, but I don't think that a player would enjoy a trip to a 50-villa neighbourhood.
As for the assassins, yes, it's not the best location, but people need killing even in small places. It's a small "office", not a fully blown hall with hundreds of employees.
How important is this town and how close is it to any "serious" settlements?
It's one of the 3 key towns, you've seen the concept art for the other 2. They are much larger.
How populated is the adjacent area?
Few people here and there.
Does any traderoute go through the town? If not, how many merchants are there(in the merchant guild)?
Yes. As for the second question, the structure is different, it's not your typical place where merchants come and trade. Overall, there are 12 people in the guild in this town.