The strongest motivators are civic pride and identity.

A town that has grown large might consider itself successful on that account alone. There were many towns that were founded but did not grow, and disappeared. Sometimes the town grew due to the civic leadership, sometimes it was environmental factors, but the decision of what to put on the signs is typically influenced by the leaders rather than historians.

Not all states are like this. In Massachusetts, for example, the signs indicate the year that town was founded, which is a large part of the town image. For example here is the sign "Entering Maynard Inc 1871" while the other side says "Entering Sudbury Inc 1639".

In the area, a town with a person's name and a 19th century founding date is pretty sure to be a mill town. A town with a 17th century date named after someplace in England is going to be a farm town. The date tells you more about the town than a population number would tell you.