Ghost Town was the name given to a place in Grand Theft Auto III, a "hidden" place, not supposed to be accessed during normal game play. This place was used in the introduction to the game where Claude is helping to rob the bank, before being betrayed and shot by Catalina. Ghost Town is basically a street with the Liberty City Bank and some Securicar's parked outside.
During gameplay on the console versions of the game, it can only be accessed by flying the Dodo there, very few of the objects are solid and so there is nowhere to land and look around. However, on the PC version, a patch was made which places a bridge which you can drive along, to visit Ghost Town more easily.
Bridge to Ghost Town Patch - made by Homer Simpson - via TheGTAPlace.com