In CY 576 (the era described by both the original folio and "gold box" set), the wonderful Darlene map indicated which of the settlements were capitals, cities, and towns (distinguishing between walled towns and those which were unwalled). These map symbols tell us where the cities are. The text tells us the definition of a "city" in this context; cities have 10,000 or more inhabitants (usually humans; demi-humans and humanoids are usually not counted in the straight population totals, but are broken out separately).
There is a slight qualifier here; some of the symbols as originally printed in that 1980 map are exceedingly difficult to tell apart. Cities have two concentric and very fine circles with the space between the lines marked off in an alternating pattern. Towns don't have the markings between the rings. Sometimes you need a magnifying glass to tell them apart.
Given the upheavals in the setting between 576 and 585, one would expect to see some population fluctuations among the cities, and indeed we do. Rauxes sheds nearly 19,000 people, Greyhawk and most of the other free cities gain, and two settlements are wiped from the rolls of cities altogether and reduced to the status of towns; Admundfort and Lo Relatarma. All perfectly consistent within the confines of the setting.
Ivid the Undying, which was later released as a free pdf by both TSR and WotC, engages in an incredible amount of "city bloat". Almost a dozen settlements that were clearly towns in the original Darlene map are given populations appropriate to cities. Was this sloppy editing? The result of not realizing towns and cities were distinguished on the original maps? Whatever the cause, suddenly the population centers of the "ravaged lands" of Aerdy were booming to many times their original size.
I have only done a spot-check of other, similar products from the era such as The Marklands and Iuz the Evil, and see a similar trend. Many places that were clearly towns before are now listed as having city-sized populations.
This trend was continued and exacerbated in the Living Greyhawk Gazetteer, which took the setting to CY 591. To take but one example, Nyrond, which in 576 was listed as having but two actual cities, is now said to be home to ten places with ten thousand or more souls. (And it's not because the borders shifted!)
I have to wonder whether this was a deliberate design choice on the part of folks like Carl Sargent, Gary Holian, Sean Reynolds, Roger Moore, and Erik Mona. I can't imagine it was ignorance or slipshod work on their part. Are smaller settlements just not considered game-worthy? Was it an attempt to try to justify the large populations for the lands as a whole? I don't have a definitive reason, but would love to hear if anyone has one (or some other theories).