A town (町; chō or machi) is a local administrative unit in Japan. It is a local public body along with prefecture (ken or other equivalents), city (shi), and village (mura). Geographically, a town is contained within a prefecture.
Note that the same word (町; machi or chō) is also used in names of smaller regions, usually a part of a ward in a city. This is a legacy of when smaller towns were formed on the outskirts of a city, only to eventually merge into it.