So it seems that while city is pretty clearly the big walled fief, small unwalled fief is called both village and town on occasion (though i think in game it's only called village, i may be wrong though) and to confuse matters more city si also sometimes called town. Now i think that, if the village was really a town (as in, a sort of central village for a cluster of smaller villages) that would explain a lot, not only how such small number of fiefs (even if we account for them being bigger in lore) can support so big of an army, and why they can restore themselves so fast after a raid (if they are just market hubs of sorts then presumably majority of people are untouched in such raids, it's just that the facilities for tax collection and trade are destroyed).