There's a lot that Cummings' isn't straightforward about in this poem. But one thing he is straightforward about is the setting. It's right there in the title: "a pretty how town." Now the weirdest thing about this setting is the word "how," since "pretty town" on its own is easy to understand. For starters, the "how" creates an internal rhyme with "town," but that doesn't get us any closer to figuring out what it means. For that, we need to read the whole poem.
Eventually, we start to figure out that Cummings' poem is actually about "how" life tends to unfold in a typical American suburb. So it makes sense, then, that the town is called a "how town," because the town Cummings describes is there to help him illustrate how life happens. So there you have it: a "how town." On top of that, the sound of this phrase calls up thoughts of children's rhymes that give this whole poem a kind of creepy bedtime story vibe. But that's what you're going to get in a poem about life and death.