Town  and commodity circulation are two closely interrelated concepts. A town is born through the exchange of commodities; it is formed by an increase in trade efficiency. The trade efficiency caused by the density of economy is the standard of rationalization of the town scale. The development of a town promotes the development from simple commodity circulation to developed commodity circulation, while the difference in the level of urbanization is an important reason for differences in the circulation level. Therefore, the strategy of being guided by circulation will be a basic way to push forward urbanization healthily in China.