If I register a domain townnamekeyword.com would that alone place high in SE results when searching for townname keyword (providing the particular town name and keyword combination is not highly used in other sites as it is highly localised)?
Crapshoot. Sometimes works, sometimes not. Domain names generally rank higher than URI paths and maybe a bit higher than "title" or "alt". But what really counts is the CONTENT. Focus on that FIRST and all the rest will follow.