At this point, AI do not move from town to town... although, now that you mention it, I can probably work something like that up.
What I have so far, is that if there are no more enemy in the town, then it is "taken" for your side. But that is just an idea - a "construct" - really. You can kinda graft whatever story you want onto it.
But, you can also teamswitch into any units there, and move them on, if you want.
The action comes from 2 different influences.
1) The AI spawn with basically a combat mentality, and waypoints that make them travel several hundred meters. That is plenty in most cities; the chances are very good that AI units will encounter each other and go into combat mode.
2) AI troops will continue to spawn in and around cities. They have the chance to be friendly or enemy. So, even if a town is "taken" it may not be that way for long, in the sense that enemy AI can still spawn there.
Also, the fundamental idea is that the mission is unstructured. It is really about pure combat. You get to decide what areas to fight in, based on where the enemy is. The goals are basically: to survive, and to fight.