This is the first episode in which we see a town meeting, and we learn that they are held on Thursday nights (somehow Lorelai gets back from business class in time for the meetings). We also discover that they are held in Miss Patty’s dance studio rather than a town hall, and never find out why, but can assume it’s for some suitably eccentric and quirky reason.
In real life, even a much smaller town than Stars Hollow would have a town hall. Washington Depot, the original inspiration for Stars Hollow, is about a third the size and still has its own town hall. The practical reason not to have a town hall on the show is that it would mean building a new set for it that would be rarely used. A town hall would also require a much larger cast to fill it to capacity.
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