MIght need to equip it if it's not already, otherwise, that's all you really do... entering the town, exiting the town screen should bring up a dialogue window asking if you want to curse the town for 10k gold. --- HA! VICTORY IS MINE!
You can only do it with certain towns, IIRC. Try a different one since I remember this happening to me at the first one I tried. --- You know, the big Valbowski is a lot like concrete mix. You know? You just get it a little wet, take a step back, and watch it get ROCK HARD!"