Literally, the edge of town is where the town ends and the country (or an adjoining town) begins: it is a line. Outskirts are the parts of town at or near the edge, they are an area. We often use 'the edge' to refer to the outskirts. The terms can be used quite vaguely - you might refer to small settlements just outside the town as 'outskirts', this is quite OK. By the way, you might live at or near the edge, you live in the outskirts.

There is no difference you can use both interchangably.

Yeah, that's a pretty subtle difference. When I think of "outskirts", usually that means a less-developed area, with a smaller population. The edge of town might also be that way, but we're really just talking about how far it is from the border of the city/town.

You are so right, thank you for spotting my mistake :)

Hi Evgeniia, My only comment is to correct the comment from a poster that says you live in the outskirts. To live ON the outskirt is correct. The outskirts are generally thought of at the perimeter or very close to the perimeter of the town so the outer edge. Think of it as a line around an area and not a defined area with borders around it. As you can´t live in an outer edge or line you say on. You live in a suburb as it is a defined area and you live within that area.