You have asked really two different questions. I will address each.
Understanding American literary naturalism: Naturalistic writers applied the concepts of Darwinism and natural selection to less scientific areas of social status and occupation. Mcteague appears to be a great dentist, but he fails because he does not have the proper education and certification. Had he been of a higher class, he would have understood the importance of these requirements. He is not of a higher class and the system (natural selection) weeds him out.
City Life - The way that the people mingle on the streets and the park, the theater, McTeague's dentist office, etc. all show the interactions of the city. You should see the stratification of the society.