My particular favorite town in Oblivion is Anvil. Not exactly sure why, but I picked it even before ever playing or opening the game. I just saw it in TESCS and I guess I liked the sound of it. Then, after seeing it ingame, I knew I had made the right choice instinctively. I know it is a bit out of the way, but that is precisely why I like it.
My Khajiit Kingdom is hidden away there where few will ever find it ... these khajiits are definitely "Don't call us, we'll call you ... for dinner! hehehe" They are quite a bunch to handle - but with The RoyAl SugarFlash

as King conducting the affairs of the small bustling kingdom, we think that they will be alright - at least until dinner bell and then it's every khajiit on her own!!!