They are still technically towns in their own right and have Town Councils. Prior to being a unitary, MK was a Borough.
Again this is not unusual. The area of what we would all call Manchester (the bit within the M60, pretty much) is not all under Manchester City Council - there are two cities (Manchester and Salford) and a load of towns that make it up, even though we would probably call the whole thing a city. And London is the same - what we would call "London" if we were describing going to it (roughly, but not quite*, the bit within the M25 or the contents of Zones 1-6) is actually made up of boroughs and a couple of cities (London and Westminster).
* Watford and Rickmansworth are inside, but most wouldn't call those "London", so Zones 1-6 are probably a better approximation.