The improvement of urbanization level in China and long-term development of economy in vast rural areas commonly impel rapid development of urbanization in China by “stronghold type” of small town and “radiation type” of big town. Urbanization roadwith Chinesecharacteristics impels urbanization and industrialization development, which needs relying on the development of small town. Due to the impact of town, space environment of “village in town” changes, and rural memory weakens.The state of “non city and non township” deeply affects rural development. Meanwhile, due to limited by urban-rural dualism, top-down planning of “village in town” is obviously unworkable. In this paper, analysis and interpretation on the problems of “village in town” are conducted, the cause is found, and effective channel of solving problem is obtained.