You would say, "In the past, people lived..." Since you are talking about the past the sentence should be in past tense form.

in addition to making it past, you should shift the in the town in the past, people in the town lived in poor conditions. "in the town" modifies the word "people," not "poor conditions"

Hi Helen, Great sentence! Sounds like you're writing an interesting essay :) Ok, firstly, we don't like to use two "in the" phrases together in the same sentence. It sounds repetitive and a bit strange. 'In the past' is a great phrase and I don't think you need 'in the towns'. What you could do the make it clear we're talking about the towns is make it describe the people. eg. "People in towns..." Or "people who live in towns..." Secondly you need a past tense because we're talking about the past. You could use the past simple: "people lived" but what would be even better would be a "used to" sentence. We use "used to" to talk about something we did regularly in the past that we don't do anymore. It's great for writing about history because it makes it clear life is not like that anymore and it makes the contrasts, the differences, really clear. So I would change the sentence to "In the past, people in towns used to live in poor conditions." I hope this information helps! Let me know if you have any questions. Katherine