Here's Wikipedia's description:
The purpose of town hall meetings is for local and regional officials to hear the community's views on public issues.
There have been no specific rules or guidelines for holding a town hall meeting. The format of the meetings can vary. Usually, the person holding the meeting (e.g. member of Congress) makes some opening remarks. Sometimes others (e.g. local leaders) will address the audience, as well. The main part of a town hall meeting tends to occur when the floor is opened up to questions and comments from the audience. Attendees generally present ideas, voice their opinions, ask questions of the public figures, elected officials, or political candidates at the town hall. Sometimes, the town hall meeting is televised or recorded. In recent years, town halls held by political candidates have announced and enforced rules on crowd behavior and the scope of questions that may be asked.
If the turnout is large, and if the objective of the particular town hall meeting is to give as many people as possible an opportunity to speak, then the attendees can be broken down into smaller discussion groups. Each smaller group, in that case, appoints someone to summarize discussion of their group.