Most activities that characters perform "in town", such as gathering information, hiring men-at-arms or guides, purchasing equipment, liquidating treasure, resting and healing, hiring NPC spell casters to identify unknown magic items or remove afflictions, training to gain new levels, etc. can be handled abstractly. It occurs "offstage"—the players make notes in their records (adding or subtracting the corresponding amounts of gold), the GM notes the number of days that have passed, and the game resumes when the players are next ready to venture into the dungeons or wilderness.
Sometimes the group will wish to play out one or more of these in-town activities rather than relegating them to an offstage between-session limbo. This could be as simple as a few minutes' pre-expedition interviewing potential hirelings, or post-adventure cajoling a local wizard to transform an unfortunate companion back into a human for a reasonable rate, or as complex as a whole session spent gathering intelligence for a major expedition. Some adventures can take place in-town with only brief dungeon or wilderness interludes, such as a murder-mystery or an adventure focusing on diplomatic negotiations or political skullduggery.
Even when these sorts of activities are played out, they still tend to be conducted in a more abstract and free-form manner than a dungeon or wilderness adventure. For instance, in town-based adventures the players rarely if ever draw a map, record-keeping of supplies such as torches or rations is rarely an issue, and a strict marching order may not be necessary or even applicable. Even the notion of keeping the party together often falls by the wayside as one character buys equipment while another gathers rumours from travellers at the inn, and a third visits the local temple. When a less-abstract reckoning is required, such as when the party is venturing into a dangerous Thieves' Quarter and are in danger of being ambushed and mugged, then the norms and standards of a dungeon exploration will generally apply—time measured in turns, movement in tens of feet (typically at the "travelling" rate of 5× normal, if the party is not mapping or expecting traps), "wandering monster" checks every 3rd turn (though in town such an encounter is usually with a beggar, urchin, pick-pocket, member of the town watch, or one of Gary Gygax's infamous Wandering Prostitutes).
Because adventures in town tend to be so much more free-form than dungeon or wilderness exploration, they can be harder for the GM to run. There is no convenient flowchart of steps, making it easier to overlook things. Also, because town adventures tend to focus more on negotiation and in- character conversation between players and NPCs, the focus is more one-on-one of player to GM. Other players whose characters are not involved in a particular scene can be left sitting around observing and waiting for their "turn" which can lead to player boredom and frustration. For both of these reasons, town adventures are only recommended for experienced GMs, for small groups of players, and for those who particularly enjoy the in-character "play-acting" aspect of the game. Be wary of bored players who might have their characters pick random fights in town just to have something to do, and realise, if this does happen, that the blame can lie as much or more with the GM than with the player.