If this is a really large-scaled game with several towns I'd start with the terrain and then build cities where it suits. It's more natural.
when/if you do this keep in mind terrain height diffrences, granted large diffrences will be obvious (cant easily build a city on the slope of a mountain)
but if your strip of land for a street goes a distace (let's say 100 quants) and your street model is perfectly straight, and pretty flat, even a height of 5 quants will cause your terrain to just up though the concrete. there are a few solutions, the one I usually use is just to make the streets first then make the terrain around the streets.