"cloud" is obvious in the sense of it being a dense shape in the air, made up of the birds, I guess an ordinary cloud doesn't do much twinkling, but if the cloud is made up of living creatures, then the movement of their wings through light and air could give a twinkling effect ... town is where ppl live, and maybe the idea is to suggest community, density of population, but flying rathter than static on the ground like a real town
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