The title pretty much sums it up. I want to know if Iron Golems can spawn if the villagers and the right variables are in place?
I'm not sure about the current situation regarding the golems, but previously, yes, they could. You can see a remaining golem at 3583, jrm531's mall, on SMP2.
Yes, they do spawn in town. Just very rarely. At a res with hundreds of villagers on utopia an iron golem spawned.
That may have been a glitch or something. Because iron golems are neutral but can become hostile, I was under the impression that they are prevented from spawning, similar to snow golems and pigmen. Whatever the case though, you can't make an iron golem farm in town, you have to do it in the wild.