Minecraft wiki entry for Settlement_guide, associated text: If you continue to expand your village and make it a town, you might discover that there are so many residents that the distance to the services is too long. Visitors who explore the city by walking may find it easier to navigate if you use all the available space inside the village, while at the same time increase the size of the buildings. One way to do this is by placing the houses together in one building, with 2 - 4 floors. This would essentially be called a “'residential building,” which have the volume of about 4 houses. At this point, the bakery, blacksmith and schools in village do not have to be placed in individual buildings, but in the same building on the first floor. This gives more space for niche markets to appear (wool shop, jewelry, cloth store, meat restaurant, fish restaurant, etc.) in the same building. This would essentially be called a “department store.” Now you have centralized the society and it stimulates activity in the core of the town.