The revolution in 1775 established that the colony of Virginia was independent from England. A state constitution was adopted by the Fifth Revolutionary Convention in 1776, the last of the conventions that served between the end of the House of Burgesses in 1774 and the establishment of the General Assembly in 1776.
That 1776 state constitution centralized all political power in the state government as the representative of the people. The House of Burgesses had chartered local municipal governments, and the General Assembly continued to establish new counties and cities as subunits of the state government, but the power of "we the people" has never flowed up from the people to a simple hierarchy of local government, then state government, and finally to the Federal governments. All local government jurisdictions in Virginia (cities, counties, and towns) were created by the colonial/state legislature, and the state has supreme power over local government.
Philosophers may consider that all power belongs first to the people, and therefore smaller units of government (Home Owner Associations, neighborhood advisory committees, etc.) serve as the building blocks of democracy. However, in Virginia political authority starts at the state level. Authority to make decisions trickles down to the cities, counties, towns, and regional agencies only when the state legislature grants authority via charters to local governments and regional organizations.
Local governments are subordinate to state authority. Reinforcing this point, the Virginia Supreme Court has adopted the Dillon Rule, based on the philosophy of Judge Dillon in Iowa. He considered local government to be easier to corrupt than state government, so it was wiser to place power in the state rather than local officials.
Virginia law, as interpreted under the Dillon Rule, severely limits the freedom of local governments. The Virginia Supreme Court requires that the General Assembly make a clear delegation of specific authority to local governments, before those governments are empowered to act. For example, the legislature has refused to authorize counties/cities to pass an Adequate Public Facilities ordinance. Some counties/cities may desire to limit development on private property until schools, roads, parks, and other public services meet a local standard of "adequate," to minimize new traffic congestion and overcrowded schools - but the General Assembly has refused to empower local governments to impose such restrictions.
The General Assembly controls the boundaries of towns and cities (and created them in the first place). Virginia towns and cities exist only as subdivisions of the state, not through any independent compact with "the people." The first three charters were granted to Jamestown, Williamsburg, and Norfolk (which was initially called a "borough"). Each charter was a unique document reflecting the circumstances of each community.
The distinction between a town and city was not significant (except in terms of civic pride) until after the Civil War and a new state constitution was adopted in 1869, under the leadership of Judge Underwood. By the 1902 Constitution, in a confusing evolution of case law and legislative practice rather than by a single simple act of the General Assembly, cities had become politically independent from surrounding counties while towns remained subunits of counties. Expanding the boundaries of a town did not remove voters or tax base from a county.
Incorporating an area into a city, however, meant that residents in the annexed area no longer could vote for county officials nor would they pay county taxes. (Until additional revisions in the state constitution in 1970, there was also a distinction between "first class" cities with 10,000 people and above vs."second class" cities with a minimum of just 5,000 people.)
The process of annexation kept taxes (as well as services...) low in the counties, and allowed town/city officials to manage logical extensions of services and to shape development that otherwise would occur outside the city boundaries. By 1902, after an annexation the rural counties were no longer obliged to pay for servicing the population and acreage that was incorporated into a city. Counties stayed rural and focused on agriculture, cities offered extra services to landowners and charged higher taxes, and the separation between the rural/developed areas was marked by the city boundary.