Learn Spanish (Spain): ¿Vivís vosotros en la ciudad o en el pueblo?

Vivís is the vosotros (you all) form of the regular verb vivir (to live). To make this form for verbs ending in '-ir', you drop the '-ir' and add -ís. The accent mark is always needed here to show that the vocal stress falls on that final letter.

Is it mandatory to include the word vosotros in this question?

No, you could just ask ¿Vivís en la ciudad o en el pueblo? because the -ís ending already makes it clear you are talking to a plural 'you'. Including vosotros just adds a bit of emphasis. Remember that vosotros is the informal plural 'you' used specifically in Spain.

Why does the verb vivís come before the subject vosotros?

In Spanish questions, it is standard to flip the normal order of the sentence and put the verb before the subject. Spanish does not have a helper word like 'do' to start a question, so it simply swaps the words to make ¿Vivís vosotros?

Does the word pueblo mean town or village?

It can mean either! A pueblo refers to a small populated area, so you will see it translated as both 'town' and 'village' depending on how small the place actually is.