After the destruction of the god-machine, Spear's activities continued with the conception of what would be an ideal city, a New Jerusalem run by mediums in constant communion with the spirits. It would be an enlightened, socialist society called Harmonia. The spot was in Kiantone, on the site of an old spring. (Spear and his followers believed the spot had mystical properties left by the machinations of an ancient race.) It only met with limited success, but the plan was to build the city according to the symbolism of the human body (most of Spear's creations follow anatomy in some way).
Of course, as awesome as all that would be as background for a modern (or historical) occult horror game, I was immediately struck by the timeframe. What if this were in the Wild West rather than New England?
What if it were in the West That Never Was?
(Note: As per the theme in the first West post, I'll reference spell names from Lamentations of the Flame Princess, but similar spells are available in pretty much every fantasy RPG. If you want to do that Boot Hill/AD&D crossover, just look for the appropriate AD&D spells and go from there.)
Harmonia is a mixed theocracy-magocracy, a community primarily run by clerics and magic-users. However, only the day-to-day operations are actually performed by mortals; the true work is done by the spirits. The local government makes heavy use of Speak with Dead, Commune, and similar extraplanar communication spells (alternately, the entities they contact are willing to come to them).
The town is completely without mundane defenses, as the government is entirely pacifistic. They instead rely on faith and the guidance of spirits to avoid external threats. (It's entirely possible that some manner of "guardian angel" guards the site against interlopers.) As expected, weapons are not allowed in town — travelers must either divest themselves before entry, or turn their weapons over to the townsfolk, whereupon they will be destroyed. (Note that if travelers just drop their weapons outside town, the townsfolk will gather and destroy them. If the travelers do something clever, like burying their weapons, but they look like the sort to carry weapons, the townsfolk will use Locate Object to find them, excavate them, and destroy them. They're pretty thorough, although it might take a few days to locate well-hidden weapons, so the PCs might be able to recover them.)
The town is built on the site of an ancient healing spring; access to the spring is free, but monitored so that no one tries to pollute the well. A single drink of water will cure the most serious ailment affecting the imbiber, as per a Cure Disease, Cure Light Wounds, or Neutralize Poison spell. (So someone who is diseased, poisoned, and wounded would need at least three drinks to be fully healed.) The water can be bottled, but loses potency after a day away from the well.
The head of the town is the Reverend John Spear, a spiritualist and minister from Back East. Now in his sixties, he was an adventurer and rabble-rouser in his youth, and is a 10th level cleric. He has a family Back East, although they do not live out here as they do not understand his spirit communion. (His daughter, Sophronia, participated in his spiritual explorations, but she died of brain fever a couple of years back. He still communes with her, however.) He is tended by a council of mediums, low-level clerics and magic-users whom he provides with scrolls when resources allow.
The townsfolk do not use wealth among each other, but when dealing with the outside world, they gather their wealth through the use of the Locate Object spell. (Gold mining is a popular profession, as is a certain level of dungeon delving.) They will sell general goods to outsiders for nominal fees (use the standard rural values; at the DM's discretion, prices may also be lower for some goods), although they sell any found treasure and treasure maps at normal (but relatively fair) values.
If your game uses Cattle Punk tech as described in the first West post, it is available here (although weapons never are). Also note that if you are just running traditional D&D, you can strip the Western elements and Victorian-level technology with no trouble. (The more technology available in your world, though, the more steampunk they get; they're all about the divine essence as a New Motive Power, an advanced engine that powers the world and whose power can be harnessed by mortals.)
Note that the nature of the spirit entities that guide the townsfolk is left deliberately vague. Spear certainly thinks they're angels and spirits of the dead guiding the town to a glorious future, but they could be anything: ancestors, aliens, angels, demons, devils, the ghosts of the ancient race that enchanted the spring, gods, psychic projections of Illuminated masters (or aboleths or illithids), spirits of the Duvan'Ku, the weird entities summoned by the Summon spell, or any other entity of the DM's choosing. The creatures chosen will naturally influence the town's goals and general feel to some degree.
Students of popular culture and science fiction may also note that "Harmonia" sounds suspiciously similar to "Harmony," the name of the Wild West version of The Village from The Prisoner.