In the Gamecube original, everyone was in the same town on a single memory card. You could start a new town if you had a second memory card (or three, four, etc.) but myself and my kids all lived in the same town and it was a lot of fun.
The game is all about socializing, whether with the animals or your friends who visit when you’re not there. It’s a good time. Just don’t mess with the clock… Resetti will find you. He will be pissed. You may not survive the onslaught.