I'm sorry, this one has me totally stumped. I haven't really played with Create a World but a couple of times. Each time going WAY over my head. So I don't even know if you were to pull the town into Create a World if it would allow you to remove the terrain paints.
However, I know from personal experience you can not delete the terrain paints via the edit world. I've tried it with Riverview and it just didn't work.
MrsFlynn