Yeah, there are plenty of good possibilties out there. I wouldn't say a fangame needs to have a theme for town names but it's a nice idea, just remember that you'll probably need to have around 10-12ish names which is quite a lot.
In canon, towns in red/blue were named after colours, in gold/silver they were named after woods. Ruby/Sapphire I think it was plants and minerals. They all worked nicely.
Truthfully it can depend somewhat on the theme of your game but here's a couple of ideas.
Musical words; Sonata, Alto, Melody, Harmony, Treble, Crescendo etc.
Fabrics; Silk, Cotton, Velveteen, Ribbon, etc.
Feelings: Mirth, Tranquility, Defiant etc. (Though a lot of negative emotions might not work for towns)
Even quite precise things can work, like reflections/obscuring things: Mirror, Glass, Ice, Mirage, Shroud, Mist, Haze (these might be only half of a name, so you might get things like Glassport or Miststone).