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# Market Town Formation

## Definition

The natural process by which specialized artificers settle near agricultural areas to provide necessary services, gradually forming small towns or villages through their mutual dependence and service to farmers. This formation occurs organically as skilled workers establish themselves in locations that maximize their utility to agricultural producers.

## Source Chapter

Book III, Chapter 1

## Context

Smith describes this as the initial stage of urban development, explaining how the settlement of artificers near farming communities creates the first market towns and enables the division of labour that characterizes civilized society.

## Economic Domain

Exchange

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