Is silent hill real tainted town?

In theory yes it is.
The true origin of Silent Hill is based on the now small Centralia, PA. This once thriving coal mining town was home to a thousand or more people. Unfortunately someone lit a fire in a basement (as the story goes) and it caught into the mine shaft. These days there are little to no people living in what is now a borough, and needless to say the fires are still burning underground.

All this is what I found out by researching "The Real Silent Hill"