Another way for a twon to form out of the countryside is for people to build homes that are legal structures on properly registered land. Then they invited their friends and relatives to buy surrounding land and build suitable homes nearby. At some point in time, The need for aditional infrastructure presents itself and the homeowners band together first as an incorporated homeowners association and later as an unincorporated community. This is typically the stage at which they have a 'volunteer' fire department that is staffed by the community members who are trained by the State Government and certified fit to serve in that capacity. Eventually, the needs of the community rise to the level that they need to impose taxes on themselves to fund further development of their areas so they seek incoporation into a city. This level of activity requires the approval or the State Government and it allow them to maintain a police force, a mayor, city council, hold elections, maintain a municipal court for code enforcement, etc. It is not necessary to go to the Government an say "I want to build a city here. Do I have the Government's permission to do so?" Some times cities just happen.
Israeli PM to Palestinian President Abbas: We must fight terror together (Haaretz)
from the article: Netanyahu's office promoting plan to relocate 30,000 Bedouin