The first known settlement in Egypt (ca 4,750 bce) was at Merimde Beni Salama, on the western edge of the Delta. It covered an area of approximately 216,000 square yards and it is possible that not all of the site was occupied at the same time. The earliest homes for the Archaic Egyptians were simple wind-breaks and tiny pole-framed huts. Later, houses of mud-brick, possibly with pitched roofs and as much as 10 feet in diameter, were constructed. An ordered street pattern and numerous public granaries were also found. This settlement is considered to have been a simple rural community unlike the settlement found at Ma'adi, south of Merimde Beni Salama, which is considered to have been a merchant town.

The settlement at Ma'adi contained the presence of imported pottery vessels and Palestinian products such as copper pins, chisels, fishhooks, basalt vessels, bitumen and carnelian beads. The modest homes of wattle-and daub were interspersed with large semi-subterrean homes. The homes covered an area of approximately 45 acres and there are also remains of agricultural activity. Evidence of craft specialization, ie the trading and processing of copper, has also been found. Interestingly enough, many fragments of Upper Egyptian pottery have also been found which makes it seem likely there was some trade engaged.

Both of these settlements were located in Lower Egypt, and can be termed more as villages than actual towns. The first towns (substantial walled settlements) were located in Upper Egypt in Nekhen (also known as Heirakonpolis) and the South Town at Naqada.

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Sources:
Archaic Egypt - W.B. Emery
Ancient Egypt - General Editor: David P. Silverman