The name G Town originally derives from the suburb in mid western Sydney (Australia) known as 'Greystanes'. The name became popular and heavily used amongst Teenagers as a reputation was built that 'G Town' was a 'cool', and 'hip' place to live.
The guidelines of using the term are vague, as modifications are made constantly, for example, 'The G'.
The 'G' of Greystanes has been incorporated into other names, for example. The local watering hole, the Greystanes Inn, is casually known as the 'GI'.
Hey mate, I hear you're from G Town too, lets hit up the GI for a beer some time.