hashi wrote:There were a lot of people in the town that day; and
There were a lot of people in town that day
Well to me "the" also is used for specificity. So depending on the context, in hashi's example, I could see both sentences being used for the same situation - for example, let's say there was a festival and two people are reflecting on that day. In that case, the difference to me would be that with "in town" because the town being referred to is implied, there's no need to specify by using an article. While, with "in the town", the speaker is choosing to explicitly specify - ie, "in the town" versus "in the surrounding areas outside of town".