From UO Second Age
A player-run town is an area dominated by housing belonging to the members of one particular guild or group. These areas will sometimes contain addons put into the game by a GM after a successful request and a fee paid by the members of said group or guild. A monthly maintenance fee is usually demanded for the upkeep of these addons. An example of such an addon would be a duel arena or universal stablemaster.
Usually, the general aim of a player-run town is to give a large guild a place to concentrate their resources and activities and often attract players from outside the guild to visit and shop at the guild's vendors, or engage in other activities with the guild members, often in the form of pvp events.