Note that the name itself refers to an old practice where a company would build a town next to their mine or factory or whatever, and they'd literally own the town where their workers lived. Some went so far as to issue their own money (company scrip) which was required to be used in the company store—the only store in town.
(The line "I owe my soul to the company store", from the old song "Sixteen Tons", is a reference to this.)
The term has been broadened over the years to refer to towns that are primarily dependent on one major employer, or one particular industry (Detroit, MI, has been called a "company town" for the auto industry). But it's never ever
been about what this trope describes, except so insofar as what is being described is a movie-industry version of the broader concept.
eta: the tl;dr version: horrible, misleading name should be changed. :)
edited 11th Feb '13 2:01:42 PM by Xtifr
"Existential Despair" is an oxymoron.