A "small city" can mean different things to different people. There are disagreements among city planners, government officials, other experts and average citizens about what defines a small city. Some claim it is population, some geographic expanse and some a combination of the two, or population density. Portland, Maine, for example is seen by many as a small city (with 230,000 people in the Greater Portland area and 64,000 in the city itself), but locals whose families have lived in Maine for generations frequently consider it a big city. It's all relative.
When trying to decide the best places to live in small cities, set your priorities first. Are you seeking a small town feel? You might consider living on the outskirts of town in the more residential areas. Are you interested in feeling the energy of the night life? The center of town might be best for you.
Considering how you prefer spending your time will help you decide what the best place in a small city is for you to live. If your idea of a good time is a small cafe with friends, consider the restaurant district. If biking or rollerblading calls to you, locate yourself near the city park or trails systems. Most small cities have an area of town where museums and shops are concentrated, so locating yourself near that part of town makes sense if you enjoy shopping and art.
