buildings are simply childrens building blocks so cut out some shapes like squares,oblongs and triangles. and see what you can build if you do the shapes in card you can draw around them. use fusable stuff to bond to the background fabric and a small zig zag stitch to secure in place, you can embroider the shop names onto felt and stitch them in place too. get a child to help build the town.
annie in the uk

CassandrasEmbroidery has an ITH Road Mat series of 3 road mats. While the buildings, themselves, are not appliqued, the roads are. They are also on sale for 75% off.
http://www.cassandrasembroidery.com/RoadPlayMat.htm
http://www.cassandrasembroidery.com/RoadPlayMatTwo.htm
http://www.cassandrasembroidery.com/RoadPlayMatThree.htm

There is a great road map at WWW.secretsofembroidery.com. It is called AT The Track.