A locality of Mexico is a distinct settlement. The definition is:
A locality (localidad), may be a city, Villa (población), Pueblo (población rural), ranchería, congregación (población) or ejido.
All cities are a single locality. Note that in Mexico's case, a municipality is not a city, a city is most often inside a municipality.
According to Instituto Nacional de Estadística y Geografía (INEGI) it is:
All places with one or more dwellings, who may be inhabited or not, and can be classed as urban or rural.[1]