This chapter focuses initially on the evolution of Australia's rural towns over the first 200 years since European settlement of the continent. Very few have become major cities, while a large number of small towns dot a sparsely settled landscape, often 50 to 100 km apart. Many struggle to survive while others prosper for a variety of reasons discussed. These dynamics are explored initially for Australia as a whole and, secondly, for a group of small towns in Australia's New England high country. The widely spaced places selected have many things in common, but also sharply differ in economic, demographic and cultural performance. This diversity also reflects a variety of local geographical and environmental circumstances, including the role played by the region's dominant city, Armidale.