The most common and most likely answer to this crossword clue is the 4 letter word MOLD
I've seen this crossword clue in The Guardian
M
O
L
D
More clues leading to the result MOLD
Buddy explains!

The straight part
We know that "Welsh town" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case welsh town = mold.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does MOLD mean?
MOLD noun- A hollow form or matrix for shaping a fluid or plastic substance.
- A frame or model around or on which something is formed or shaped.
- Something that is made in or shaped on a mold.
- The shape or pattern of a mold.
- General shape or form.
- Distinctive character or type.
- A fixed or restrictive pattern or form.
- A group of moldings.
- A fontanelle.
- To shape in or on a mold; to form into a particular shape; to give shape to.
- To guide or determine the growth or development of; influence
- To fit closely by following the contours of.
- To make a mold of or from (molten metal, for example) before casting.
- To ornament with moldings.
- To be shaped in or as if in a mold.
- A natural substance in the form of a woolly or furry growth of tiny fungi that appears when organic material lies for a long time exposed to (usually warm and moist) air.
- To cause to become moldy; to cause mold to grow upon.
- To become moldy; to be covered or filled, in whole or in part, with a mold.
- Loose friable soil, rich in humus and fit for planting.
- (chiefly plural) Earth, ground.
- To cover with mold or soil.