You need to look up the meaning of "serf." Serfs did not live in towns; they lived in the servant quarters of a mansion or castle, occasionally in a cottage on the lord's lands, and worked the fields for the master of the land. They were a step up from slaves because they usually owned a small plot of land for their own produce, but they had to pay taxes, and had to give priority to the lord's needs.\n\nIf the lord owned a large amount of land, the serfs, including craftsmen like smiths, would live together or in small cottages near each other in a village, even more than one village. They were not towns in the sense we use today. Barter was often used for obtaining goods that were not produced or made at home.\n\nObviously, the villages allowed persons with different skills to live together and satisfy their needs as well as the needs of the lord. As time went on, the serfs were paid in money rather than in just the protection the lord offered, and the lords began to realize that they could make more by taxing or charging the serfs for services. The serfs realized they could act together to oppose things like high fees for grinding wheat or corn, or even set up their own mills on their own land. The feudal system was coming to an end.\n\nhttp://en.wikipedia.org/wiki/Serf