If a Town advertised for a position and no one applied; can the Town lower its reqiirements and hire without A

It depends on the position, and how far the town is from a larger town or city. Maybe the town can find new places to advertise, with the same requirements.

What kind of position are we talking about? Is it a specialized position, or is there no one qualified because it is a small town?

Depends on what position is open. Some jobs have government required degrees and such. There is also a possibility that if town employees have a union there be union requirements that have to be met.

if no qualified person applies, they must look elsewhere.