So there’s Paris syndrome, Jerusalem syndrome and Stendahl syndrome, which is linked to the city of Florence. Think about the madnesses cities impart on their visitors: hallucinations, derealization, obsessive ideas and more.
In a role-playing game, a city may have a very palpable effect on people foreign to its bounds. The citizens seems perfectly normal, but they are acclimated to the conditions. The traveler cannot handle the city’s influence and their mind cracks under the pressure. Or the citizens seem mad to the outsiders, but their perceptions and actions are perfectly normal by local standards. Slowly the visitor finds themselves slipping into a matching perspective and modes of behavior.[1]
It can go both ways. The city may affect its people, but the people affect the city. If the population changes enough, the character of the city changes. We see that in real life all the time as large scale population change affects the culture and tone of a community. In a role-playing game, that change could be more visibly expressed in the metamorphosis of a city’s genius loci — or City Fathers, as Werewolf: the Apocalypse called them — or even a struggle between different entities, a la the Invisible Clergy of Unknown Armies. Imagine if every city had its own pantheon of City Fathers, expressing different aspects of the community. As the population changes, so the influence of those spirits rises and falls.
[1] That particularly reminds me of Al-Amarja from Over the Edge. The citizenry have any number of curious practices, like nooses for neckties. The people who stay there long enough start to assimilate, intentionally or otherwise.