Source : Webster's Revised Unabridged Dictionary (1913)

Municipality \Mu*nic`i*pal"i*ty\, n.; pl. {Municipalities}. [Cf.
   F. municipalit['e].]
   A municipal district; a borough, city, or incorporated town
   or village.

Source : WordNet®

municipality
     n 1: an urban district having corporate status and powers of
          self-government
     2: people living in a town or city having local self-government