The concept of embassy ranks is pretty simple. Ranks a mayor can give you outside of a town, like an embassy plot. They would be exactly like the normal rank except you don't have to be in it. To give a rank (e.g embassy builder to Dwarfoo) type /t eRank add Dwarfoo builder. In /res it would appear like this:
Ranks: Recruiter, Vip(Mooville), Builder(Hyrule)
To conclude, town ranks need to be available to any player the mayor deems worthy of the rank, not just a resident of that town.