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>What's with people calling cities and towns in foreign countries villages?

I dunno. Why do we call them neighborhoods when hardly anyone knows their neighbors?

Because even if you don't know them they're still your neighbors.

Why do we call them “drive ways” when we park in them? Why do we call them “parkways” when we drive on them?

The amount of traffic on some parkways can make one feel as if they park there though.