If you wanted to live in Italy, in a city less than 5 thousand ..where would it be?

Your succint answer begs the question: why? If memory serves me correctly, you took off to Italy for a few months. I guess you're back home in the US? I'm sure there are lots of us interested in how you enjoyed your stay...including me! Spill!

Yeh, sounds like time for a trip report.

For me, Spello in Umbria.

San Gemini, Umbria
Montefalco, Umbria
Todi, Umbria
Panzano, Tuscany
Volterra, Tuscany

a kinda/sorta trip report: https://community.ricksteves.com/travel-forum/trip-reports/2-months-to-spare-for-italy

Italy is administratively divided into 20 Regions. These are divided into Provinces (there are 110 Provinces in total in the 20 Regions). Each Province is divided into municipalities ("comuni" or communes). Each municipality comprises multiple smaller villages, called "frazioni", literally "fractions".
The village of Volpaia is a "frazione" (fraction or district) part of the municipality of Radda in Chianti, the seat of the municipal city hall, called "capoluogo comunale" (municipal seat town).
There are over 8,000 municipalities in Italy. I don't even know the total number of villages (frazioni) and "capoluoghi" but it must be in the neighborhood of 50,000. Of the over 8,000 municipalities, 5,858 (almost 3/4) have a population of under 5,000. But even the larger municipalities comprise villages (frazioni) that are very small and have a small village feeling. For example my own municipality of Florence (pop. 370,000) includes frazioni such as Settignano or Nave a Rovezzano that will make you feel like you are in a countryside village, even though they are now just "districts" of the 8th most populous municipality in Italy.
Each person could probably come up with a different favorite out of the tens of thousand towns and villages under 5000 residents. I personally could not come up with one in particular since there are so many wonderful such small places to live in Italy. In fact most rankings for best quality of life in Italy do not refer to villages or municipalities, but rather to Provinces. Provinces are closely related to Counties in the United States. Provinces and the Regions where they belong are actually very important as many services (health, education, etc.) are managed at that level of government rather than lower levels. For example Volpaia, being just a frazione (fraction) of Radda, should be judged as part of the Municipality of Radda or the Province where it belongs (Province of Siena in this case). Of the 110 Italian Provinces, the Province,of Siena (in the region of Tuscany) ranks pretty high. This is the Quality of Life Ranking of Italian Provinces in 2015:
http://www.repubblica.it/economia/2015/12/27/news/qualita_della_vita_la_classifica_delle_province_italiane-130188489/

I am not going to filter my response by limiting myself to municipalities less than 5,000. But just from personal experience, they would be:

1. Taormina, Sicily
2. Salerno, Campania
3. Florence, Tuscany

I like a little more action. I've always thought that while small towns may be idyllic, in the US at least everybody's into your business and I can only imagine that Italy is no different in that regard--it could end up more of a prison than escape. Give me the magnificent vistas and Mediterranean cuisine of Taormina, the grittiness-yet-beauty of a workingclass small city like Salerno, and the history & walkability of Florence, along with its proximity via train to the rest of the country.

Monte Argentario
Isola d'Elba
Florence
Siena
Lucca
Taormina

None of these have less than 5000 inhabitants.
Todi has 17000 inhabitants for instance

What is magical about 5,000? I wouldn't live in a town of less than 5,000 in the US.

Unlike Frank I think I'd like to live in small places like that. Although I grew up in Florence my parents were originally from a small town about 60km from Florence, so I spent many summers in that town. It is true that since in small communities everybody knows everybody people might get into each other business, however the relationships people have with one another are deep and you can always count on the entire town to help you when you need. It's basically like a close knit family. It is also true that I need the vibrancy of a bigger place, therefore my preference would be a small town in very close proximity (15-20 min) to a larger city.

Ostuni, Puglia
Avola, Sicily
Modica, Sicily

Each a bit larger than 5,000, but would offer a bit more (services, shops, opportunity to socialize and attend events without driving to the nearest larger center).

My personal choice would be a small city, which would offer a year-round set of things to do, a variety of interesting daily walks, and good car-less transportation options (for most days):

Siracusa, Sicily
Lecce, Puglia
Verona, Veneto

The main thing in a city is that you have friends there and that it is rather peaceful and walkable and find main commodities and access to essentials without having miles to run.

I suggest Volterra!
It's an enticing medieval village, rich in cultural masterpiece and art, qhere you can taste the authentic side of Tuscany (and the traditional recipes). It's just a stunning place, surroundend by a delightful countryside where you will find great opportunity for villas and apartments in downtown.
just an example, check the offer on [www.volterracasa.com[1]

Or, if you are looking for a little burg of about 20/30 houses, try to search about Iano di Montaione.

Montecatini Alto in Tuscany is very small with lovely view of the region. Cisternino in Apuglia is about 5, 000 residents. I have had the pleasure of staying in many towns in Italy but those stand out. I prefer to be near the ocean so Cisternino would be my my choice behind Sorrento which is of course much larger. Check them out, you will not be disappointed.

Lorie

Not sure if they are less then 5,000 or close but i'd have a tough time picking between

Citta Della Pieve in Umbria or Dozza in Emiliga Romagna

I would pick someplace with a train station and a direct connection to a major city, such as Rome or Florence.

I agree with riccardotronci. Volterra: so beautiful, so quiet (at night after the tour buses leave) so much rich history.

We loved Volterra but found it to be a little off the beaten path (no trains.)
That leaves us with Orvieto, a lovely hill town with a train station at the foot of the hill. You can be in Rome in an hour.