Answer: Why could it not be both?
What is meant by “city”? The Hebrew word (‘iyr) has two meanings. The first meaning is “excitement; anguish (terror).” The second meaning is “a place of waking; guarded.” Basically, a city in the ancient world is a place, an encampment, guarded by a watch.
We must be careful not to superimpose our present understanding back into the text or history. There is no ancient world implication (or concept for that matter at this point in time) of large populations, of trade, tradition, culture or of permanent buildings. Even if there were permanent structures (such as those from the much-later Greco-Roman times), most “cities” were no larger than a single unit of present-day apartment buildings. Larger ancient cities were not all that "large." The ancient city of Capernaum was no more than 14 acres, for example.
Are there not people today (such as the Bedouin--from “bedu” signifying one who lives in the desert) who live in tents, always keeping watch, always on the move? The one who upholds the responsibilities of manhood is the pinnacle of hierarchy in the family (consisting of at least adults with their children). When resources permit, groups of families stay together--mostly of the same herd-type--and the hierarchy requires a higher level of management. There is no indication that Cain’s position grew to such a high rank as “sheik” (for point of comparison).