@Sofatroll I really like that idea, however I see some issues.

With that many ppl, the citizens of your town would be second biggest group on the server. There is a reason why groups/factions tend to not grow that huge, it's because the more ppl you live with, the harder it gets to avoid chaos. Keeping a group of 20ppl together can be insane, you'll need a very well working system unless you want to see your society collapse after a few days.
Remember, there is no protection against griefers. Also police doesnt work at all, even if you would manage to have at least 1-2 policemen on all day long (which would be incredible), it wouldnt help at all. It might help to keep away random griefers, but once the wrong ppl get your coords they will just wait for a good moment when not many of you are on and blow your town up.

I don't think that greifers will be too much of a problem because the town will be hard to get to for non-citizens