Townships are units of govt that are subdivisions of County, typically
square, population and urban form varies (to save you the trouble of
reading the wiki article he suggested you read if you don't know what
they are).

If the township contains a series of tiny places, but people do
genuinely give the whole thing a name, then place=locality is probably
the most appropriate for a first pass (there can be place tags on the
tiny places as well, but that's not what he was asking about). If it
ain't right, someone can change it later.

Richard

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