I'm out in a walk (rural village so off over the hills) and have passed more than a dozen people, most of whom I don't know, some I do and some I only recognise their faces but each and everyone has smiled and said hello.
My sister came to visit last year and couldn't understand how I knew every single person I passed. I told her I didn't, we just always greet each other. Sometimes even going as far as remarking on the weather etc.
What's it like where you live? I'm in SW Scotland. Technically our 'village' is the size and population of a town so not too small really.