katute kono mati ni sunda.

Japanese often leaves out the subject when it is clear from context.

So かつて　この　町　に　住んだ。 can mean something like I once lived in this town, he once lived in this town, and so on, depending on the situation.

If you want to state the subject explicitly, you could say:

• 私はかつてこの町に住んだ。
• 彼はかつてこの町に住んだ。

But in natural Japanese, leaving it out is very common.

かつて is an adverb. It means formerly, once, or at one time.

It has a somewhat formal or literary feel compared with very casual everyday alternatives like 昔.

For example:

• 昔、この町に住んでいた。
  more conversational
• かつて、この町に住んだ。
  more formal or narrative

So かつて is not wrong at all, but it can sound a bit more written or reflective.

この is a demonstrative that goes directly before a noun. It means this.

So:

• この町 = this town

You cannot use この by itself. It must be followed by a noun.

Compare:

• この町 = this town
• この人 = this person
• この本 = this book

If you want to say here instead, that would be ここ, which is a different word.

この町 means this town, while ここ means here.

So:

• この町に住んだ focuses on the town
• ここに住んだ focuses more on this place here

In English, both might sometimes translate naturally, but in Japanese they are slightly different in focus.

With the verb 住む meaning to live / reside, the place where someone lives is usually marked with に.

So:

• 東京に住む = live in Tokyo
• 町に住む = live in a town
• この町に住む = live in this town

Here, に marks the location of residence.

住んだ is the plain past form of 住む.

The dictionary form is:

• 住む = to live, to reside

The past plain form changes like this:

• 住む → 住んだ

This is a common pattern for -む verbs:

• 読む → 読んだ
• 飲む → 飲んだ
• 住む → 住んだ

This is a very common learner question, because both can relate to a past state.

• 住んだ = simple past
• 住んでいた = was living / used to live

In many real-life situations, 住んでいた often sounds more natural when talking about a continuing state in the past.

For example:

• 昔、この町に住んでいた。
  I used to live in this town.

By contrast, 住んだ can sound more like a completed fact in a narrative or summary. It is not impossible, but it can feel a bit more literary or concise.

So this sentence is understandable and grammatical, but in casual conversation many speakers might prefer かつてこの町に住んでいた or 昔この町に住んでいた.

Yes. It is a complete sentence.

Japanese does not need to state a topic or subject in every sentence. If the listener already knows who you are talking about, the sentence can simply be:

• かつてこの町に住んだ。

If you want to make the topic explicit, you could say:

• 私はかつてこの町に住んだ。

But the shorter version is perfectly normal when the context is clear.

No, but putting it near the beginning is very natural.

These are all possible:

• かつてこの町に住んだ。
• この町にかつて住んだ。

The first one is probably the most straightforward and natural in many contexts.

Japanese word order is flexible, especially with adverbs, but the most neutral order is often easiest for learners to follow.

It is grammatical, but it may sound a little formal, written, or narrative because of the combination of:

• かつて
• the plain past 住んだ

In everyday conversation, people are more likely to say something like:

• 昔、この町に住んでいた。

That sounds more like natural spoken Japanese.

So the original sentence is fine, but its style is a bit less casual.