Not necessarily. I seem to remember someone doing a game based around a motorcycle gang once. Think they created the area along a stretch of highway rather than a city.
That was me, and my group still doesn't have a "city" per se, but neither did we create a section of highway either. We pretty much ignored the entire City Creation section of the game except for the idea of Theme Aspects, and it's working just fine for us.
I also wanted to say that there really doesn't need to be a minimum size of city at all for a game to be interesting. Twin Peaks, for example, was a small town and some interesting stuff happened there.
Bon Temps, LA (True Blood) is a small town too and they have all manner of beasties running around. It might give things possibly a more political flavor (in the sense of "everyone's gonna know if I just shoot this guy so let's find another way round it") if it IS a small town and every supernatural player knows the others. You could limit the "bestiary" of supernaturals down to a reasonable, more focused size, OR you could go the other way and throw everything you can think of. Then, maybe there's an underlying reason there are werewolves and demons and vampires and ghosts all flocking to this one small town.
