Development of the moon will follow a pattern similar to that experienced by earth over the milleniums. Many initial settlements will grow and, where located at a site with physical and economic advantages, will eventually become towns and even cities. A detailed draft Development of the Moon document may be found on the internet.
Likely moonbase sites have been proposed in studies undertaken in recent years. Prime locations are shown on the moon image to the left and discussed below:
There are two reasons why the lunar poles might be attractive as locations for a human colony. First, water is present in some continuously shaded areas near the poles. Water may be found to be equally distributed at both poles, or it may exist only in select craters. Second, because the Moon's axis of rotation is almost perfectly perpendicular to the ecliptic plane, it may be possible to power polar colonies exclusively with solar energy. Power collection stations can be located so that at least one is in sunlight at all times, yet all are close enough to each other to be connected in an electrical grid. Some sites have nearly continuous sunlight.
Which pole is selected for the moon base will be determined by which pole provides the optimal combination of water and sunlight. Right now the betting appears to be on the south pole region.