What I am looking for here is help composing a comprehensive list based on the average population of each type. Other information that determines how they are classified (I.E. Hamlet becoming a Village only after building a church) is extremely helpful as well.
THANKS IN ADVANCE
www.io.com/~sjohn/demog.htm
Check out this site. It will likely answer all of your questions:
www.io.com/~sjohn/demog.htm
Boomarked! Thanks for that site!
Additionally, I want to create this composite with D&D (Preferrably Forgotten Realms if there would be differences in this particular area) structure in mind. I have noticed that there are often conflicting answers when different cultures used the same terms. An example can be seen here:
en.wikipedia.org/wiki/Shire
where Britain and Australia had different structures that were both reffered to as shires.
Hamlet: a small village, usually without a church of its own but belonging to the parish of another village or town; populations between: 100-250
Village: a group of houses, usually smaller than a town but often with its own system of government; populations between: 251-1000
Town: a large group of houses and other builders, smaller than a city but larger than a village; populations between: 1001-10000
City: a larger grouping of houses and other builders, larger than a town and usually governed by a Mayor or Town Council; populations between 10001-25000+
Metropolis: a massive grouping of houses and builders generally considered much larger than an average city; populations between 100,000+
ALTERNATES
Borough: a town that has been "incorporated" granting it certain rights and privileges similar to those enjoyed by a city; often guarantees the Borough the right of self-governance
Burg: same as a town or village but often with a walled defense
Settlement: the establishment of a person or persons in a place that is considered permanent but often in a new territory or country; aka a "colony"
Commune: the smallest division for local government in France, Belgium, Italy and several other European countries; roughly defined as a group of people living and working together
(According to the World Book Encyclopedia, in general, all communities in the US with 2500 or more persons, as well as smaller communities located near larger ones, are considered "urban." This definition varies across the world. The United Nations considers as urban only communities that have a population of 20,000 or more.)
If anyone can offer ways to expand upon this with similar terms (something that Player's can recognize as referring to some sort of community establishment) that may be less common, but used by "the locals" to make reference to these in their own area.
I figure that a Knowledge Check of some sort could be applied to relate the term to a more common one the rest of the PCs are familiar with.
In this way, I can allow for more flavor in the campaign & yet maintain a familiarity with the overall world the PCs are in.
***For anyone else who is interested in making an outline like I am; I am adding:
"A grotto (Italian grotta) is any type of natural or artificial cave that is associated with modern, historic or prehistoric use by humans." Source- en.wikipedia.org/wiki/Grotto
While a grotto may not be quite as defined in regards to people; it can be used as a living environment for a cult that the nearby villagers may think are "shunning the advancements of normal society".
You should also suck it up and read a few books. 
"1000 AD", "Life In A Medieval Village", "Life In A Medieval City", and "Life In A Medieval Castle" have all been invaluable to me in creating locales with a realistic foundation. I just recently finished "Medieval People", which is from 1924 but was one of the first books that dealt with common people and their daily lives when the shelves were replete with books on King So-and-So, the Great Battle of Whoziwhatsit, and other "important" history. (Author's last name is Powers, can't recall her first name.)
"1000 AD" was great read. It was released in fall of 1999, when everyone was pushing the panic button over the Y2K catastrophe. Apparently, as sophisticated as we like to think we are compared to the stupid, bumbling peasants of a thousand years ago, not much has changed!
You may not get as clear an answer as you might think and this may add to the local colour of your campaign. In Britain, a city exists by Royal Charter. Every so often the monarch grants a town a charter which means it can call itself a city until the charter has been revoked. Other places in the world have different definitions, so what the elves call a city, would be entirely different from what humans would call a city and so on.