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The rural-urban divide has traditionally been used to characterize key features of regions, including features of economic geography like density and connectivity that determine the prospects for economic growth and other dimensions of territorial development. In this paper, we develop a methodology that identifies areas along the urban-rural continuum according to their key features of population density and distance to large urban settlements at a more-detailed scale than the smallest administrative areas, taking Chile as a case study, a country that has experienced a rapid socio-economic transition over the last three decades. Information derived from the application of this methodology allows the identification of geographic categories according to observable density and distance. We also present geographic definitions of urban, rural, and mixed areas, which allow a practical, policy-relevant taxonomy of the rural-urban landscape, consistent with the 3-tier approach taken in most OECD countries. We demonstrate the relevance and practical importance of this smaller-scale approach by showing that, in the case of Chile, there is a significant mismatch between the official, cruder definitions, based on political subdivisions and currently in use by the government, and the realities of the country's present rural-urban landscape. Our results demonstrate that a focus on the scale at which information can be interpreted and summarized is not merely an academic exercise, but a way of correctly identifying, within the policymaking framework, communities according to the realities of their needs and capabilities. • Density and connectivity are used to create an urban/rural continuum. • Connectivity, measured as travel time, is derived using modern GIS tools. • The urban/rural continuum can be aggregated in a familiar binary taxonomy. • The scale at which density is estimated is key to describe geographic units. • Urban/rural categories relevant for practical policy analysis are presented. [ABSTRACT FROM AUTHOR]