Why do certain small towns thrive and others struggle?

"Some towns seem to be having more fun, seem to have their act together," singer-songwriter Dar Williams told CNBC's "On the Money" in an interview. "They have more dog walkers, more signs that say 'free coffee' instead of 'no bathroom'."

Williams has sold millions of albums, and spent a career on tour and on the road, performing in small towns for more than 20 years. From that unique vantage point, she's compiled many of her favorite places into, "What I Found In a Thousand Towns," a new book published in September.

"I've been to a lot of towns where there's almost this kind of collective feel of people choosing to say, 'I'm going to be with neighbors and that's a good thing,'" she explained to CNBC. "And so I called that 'positive proximity.'"

In her book, she defined the term as "a state of being where living side by side with other people is experienced as beneficial."

Public and outdoor spaces, and projects that build on a town's identity or unique history, are traits that successful communities have in common, Williams said. A third is what she calls "translation," or drawing on the unique talents of all citizens.

Some of the "hundreds of towns" where she said she's seen positive proximity "firsthand" are diverse places like Moab, Utah; Carrboro, North Carolina, and Middletown, Connecticut.

If you want to improve the local community where you live, where do you begin?

"Ideally, your school, your park," Williams suggested. "You want to dig in, you just want to find that place where you belong and your contribution is valuable and you feel understood."

A town she wrote about that she "loves" is Phoenixville, Pennsylvania.

"They rose up from their post-industrial, post-steel mill past just on their own steam. No new company per se," Williams said. "Just getting into their old architecture and enjoying what everybody could offer is inspiring."

Located about 28 miles from Philadelphia, the 1957 horror movie, "The Blob," was filmed there. Taking advantage of that unique local history, Phoenixville now has an annual "Blobfest."

"This one weekend they talk about sci-fi, it can get very serious. I was there…and the stores all participate and they are very proud of that," Williams said.

"One of my new mottos is 'Every Town has a Blob.' And Phoenixville really showed how much you can do just by digging into your own identity, your own past and finding one another on the way," she added. That was just one of 38 places Williams features in her book.

"I like small towns. I'm rooting for all of them," the singer added.

On the Money airs on CNBC Saturday at 5:30 am ET, or check listings for air times in local markets.