The town councilor really does not have many different privilege's.
I think of it in several ways, some of them I will say here.
#1
I think of it as a way to identify an actual councilor. Like someone who gives advice about the game to town members and also can vote on diplomatic issues (if your town wishes to do that).
#2
I think of it as an "heir" of the town founder. If the town founder were to resign, the councilor or "heir" as I am calling it here, would take up the founders position.
#3
I think of it as a way to identify a special person in the town, say.. someone who is wise, strategic, and strong commands the troops or someone who is good with their words and is also wise handles diplomatic issues.
My advice is:
Make the town councilor what you want it to be.
I've never owned a town or anything, but from experience in Tribal Wars this is sort of the same thing. Just different names for the ranks really, and also there is only 3 ranks in TheWest. (Founder, Councilor, Citizen)