Breakdown of jinkou ga sukunai toshi ni sumitai desu.
ですdesu
to be
がga
subject particle
にni
at; on; in; to; for [indirect object particle]
住むsumu
to live in, to reside
人口jinkou
population
少ないsukunai
a few; a little; scarce; insufficient
都市toshi
city
都市 is more generic than 市 and refers to the concept of a city as a populated and developed area. It doesn't necessarily imply a political or administrative boundary like 市 does. The term 都市 is more comparable to the English use of urban area or metropolis.
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