I’ve always been a bit amused by some of the words that were selected early in the life of RPGs to act as ways to describe things that really were not very different. But because they were adopted early, they’ve remained.
In this case, the words in question define the size of a village, but they should do a bit more than that. I will make some suggestions that I’ve not seen used.
Thorp or Thorpe
A thorp is the smallest form of village and it should be used to refer to settlements that are 20-49 people in size. There is no government and possibly no businesses, with the reason for nearness often being the most basic one – the members of the budding village are family. Common extensions for these places include -thorp, -thorpe, -porp, -dorf, and -dorp.
A hamlet is a step upwards from a Thorp, with a population of 50-199 good people. There are still no government buildings, but a business or two are likely and several clans of folk are almost certainly living here. Common extensions for places this size include -heim, -ham, -heem.
A true village almost certainly has a fundamental government and at least one religious structure. The government might be as small as a mayor or it might have a small council. A larger village might have a sheriff to keep the peace. The village might own land, such as a communal marketplace or a place for caravans and other visitors to camp for the night.
Places of this type are not as clannish or suspicious as the smaller villages.
Villages will have 200 to 1999 people. Common naming extensions for places this size include -stead, -place, -ville, -vale.
Fantasy worlds are not safe places. Thorps and Hamlets should be more common in patrolled or civilized lands, but uncommon to rare where things like goblins, orc, gnolls, and trolls would find small settlements easy targets. Still, places have to grow, so new settlements will sprout up where there is safety and money to be made.
Places often retain the extension on their names, so it is possible for towns or even cities to carry the name given to a thorp or hamlet.
These small places should not be especially tolerant of new comers, especially those of clearly different races. Superstition and ignorance should combine to make the less traveled villagers difficult to be around unless the place is near a larger place such as a town or city.
Protection for these small settlements will come from the larger regional government. Particularly troublesome regions might have a temporary garrison in or near larger or strategically important villages.
Coincidentally, almost all random population systems will break things down further into 3 categories of town (small, medium, large) and into 3 categories of cities (small, medium, large). There are no special words for each category, which makes the thorp/hamlet/village system feel like the start of an unfinished word search or something.
I’d break with the trips format and go with Burg / Town / City / Metropolis for the remaining descriptors. Using some term that requires a google search isn’t what I would want.
As a small aside, in medieval France, a settlement of any size was considered a city if it contained a Cathedral. Just a thought, that perhaps the names of places could reflect some important societal goal which in turn would give other some expectation about the organization and strength of will of the inhabitants.