Photo credit: The Stirling Smith Art Gallery & Museum
This is not self-evidently a 'town'. It is a coastal view at sunset, with boats and a building with a sheltered terrace - almost certainly southern Italian, given Smith's history, and perhaps the Bay of Naples if the mountain back left is Vesuvius.
Unless this is just a fantasy scene, if it does show the Bay of Naples looking towards the mountain volcano that is Vesuvius, it cannot be at sunset. There is no large body of water directly to the east of the volcano that would place it (the mountain) between the painter, the Bay and any sunset. If it is Vesuvius then the time is more likely sunrise, perhaps at a moment that captures a number of boats heading out for a fishing trip. If so, the artist would be positioned somewhere along the Posillipo coast, especially if, as the sun seems very low in the sky and is almost directly above the depicted mountain, the artist would be looking in a straight West to East direction.
Also, this might not even be Vesuvius, unless its secondary Somma peak is hidden behind the sail of the vessel on the left of the painting.
My mention of Vesuvius was hasty and probably misleading, just on scale. It may be looking out towards some island or promontory somewhere along the coast near Naples, as the boats and Smith's movements tend to indicate.
Boats returning from a day's activities are likely to heading in towards the land, whereas those in this painting appear readied for sailing out into the sea, possibily supporting the suggestion that this is a sunrise scene rather than a sunset one. The image, though, is so distressed that it is hard, even on the ArtUK main site, to work out much of the more subtle details.