As you point out, the past simple form and past participle of the verb "to bind" is "bound". There is a separate verb "to bound" which is most often used in the passive, like in your example of the town. Note the "by + agent" which indicates a passive form. See also: http://www.oxforddictionaries.com/definition/english/bound#nav2 (verb 1). I had not thought about it before, but I would say that "bounded" can only ever be a past participle verb form, and not an adjective. This would be consistent with the Oxford definition I cited. Also, Oxford has no separate adjective entry for "bounded". Good question.

You can look this up online for yourself, but anyway... 1) "Binded" is a nonstandard version of "bound". Don't bother using it. 2) "Bounded" means "with boundaries/limits", in the sense of boundary. You do know that "bound" is a verb which means "to leap or spring forward"?