The municipal corporations existing in this state are divided into three classes, to wit: cities, towns and villages. Those having two thousand inhabitants or more shall be classed as cities; those having less than two thousand and not less than three hundred inhabitants shall be classed as towns; and those having less than three hundred and not less than one hundred inhabitants shall be classed as villages. No municipal corporation shall be created hereafter except those classed as cities or towns. However, a municipality may be created in an area embracing not less than one square mile wherein there is then in existence or under construction not less than one mile of improved hard surface streets, with a total of not less than six streets making up said one mile of hard surface streets and there then exists or is under construction a public utilities system which shall include a waterworks system or sewerage system, or both. Nothing herein shall affect the status of any municipal corporation heretofore created and now existing, and all such municipal corporations, including villages, shall continue to exist as such with all the rights and privileges thereof.
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