In the middle ages, what made cities develop in one place and not another? I ask because there’s a strange lack of cities in Westeros (a place the size of South America, I believe someone said once).

There’s a number of factors involved:

• Geographic: access to a good natural harbor or a river that offers good access to the interior, being at a ford or mountain pass, being at a crossroads. 
• Political: a royal court or the court of a powerful lord, or an actual sitting judicial body. 
• Religious: a prominent cathedral, church, or monestary, the location of an important shrine or reliquary or some other association with an important saint, being on the route of a pilgrimage. 
• Economic: having a charter to hold a market, nearby miines, a concentration of a particular industry like metalworking or textiles, etc.