I looked it up, and La Falda is larger than a village. It has a population of 16,000 (by comparison, Taxco in Mexico, also nestled in the mountains, has a population of 50,000 and is considered a "city").

Here is an (awkwardly written) description, which to me has the feel of a small city.

This renowned tourist centre offers services of very good quality, and is priviledged by its splendid microclimate. This locality is situated on El Cuadrado hillside, and displays landscapes of sierras considered to be among the most appreciated in Córdoba.
La Falda is bounded by Valle Hermoso on the South and by Huerta Grande on the North and is one of the richest centres in the Punilla valley, with a quite active commercial life. Several shops over the Edén Avenue attest to this.
It posseses a rich history reflected, for example, in the magnificent Iglesia del Santísimo Sacramento (Holy Sacrament Church) , which can be seen from different points of the city.
It has several natural beach resorts and many possibilities for adventure tourism within the beautiful sierran surroundings. La Falda Dyke, gives the possibility of practising fishing and water sports.
This city offers, without any doubt, a very good alternative for your summer holidays. Tranquility and calm, day and night entertainments, gastronomy for all levels and a varied offer of lodgings: different categories hotels or beautiful hostelries with all the flavour and tradition of the homemade cuisine and pastry. In brief, all the possibilities for your rest and amusement.

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Note added at 2 hrs (2006-07-11 05:16:37 GMT)
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Tepozlan is about the same size (15,000), and it's called a "town."