I love trying to think of these!
I usually name towns according to some imaginary parallel I have in mind, because I usually write in a fictional America that's almost exactly like this one.
Here are some parallels I have, not sure why they're all in Georgia...
Bedford, GA: my hometown
Spaniel, GA: a tiny factory town with a large division of wealth
Willibald, GA: Atlanta
Pandora, NY: New York City
Mitleid, GA: also my hometown
Breckton County, GA: rural unincorporated farmland
Santa Tomasa, TX: I dunno, San Jose?
Laughing Waters, Cussia: some little village in fake-Russia out by the Wolgria River
Then my mom's got a good one for her small southern town... I'm not gonna be able to sleep until I remember it. But she did have a river named the Diamondback, which I found inspirational for naming some of my own geographical features:
Cottonmouth: flows through Breckton and Mitleid, a tributary of the Diamondback
Forella: the Hudson
Marvel Bay: Hudson Bay
All right, now for some suggestions!
well. Marvel, for one thing.
Lillian - why not? lots of towns are just names, there's a town near us called Alexander City that we just call Alex City
Prospera (a la Fredonia)
Forte (prn Fort)
Wood And Dale (I think I'm gonna use that one)
Also, I know this is obvious, but this list is some good inspiration:http://en.wikipedia.org/wiki/List_of_towns_in_Indiana
Some awesome ones... Birdseye? Battle Ground? Crows Nest? Cynthiana? Converse?