Townsend was born in Leicester, the oldest of five sisters. Her father had worked at a factory making jet engines before becoming a postman, while her mother worked in a factory canteen. She attended Glen Hills Primary School, where the school secretary was Mrs Claricotes, a name she used for the school secretary in the Adrian Mole books. At the age of eight, Townsend contracted mumps, and was obliged to stay at home.

The Queen and I (1992) is a novel imagining that the Royal family have been rehoused in a council estate after a Republican revolution, although it turns out to have been merely the monarch's nightmare. Townsend had become a republican while a child. In an interview for The Independent published in September 1992 she related that after finding the idea of God a ridiculous idea, an argument in favour of the British monarchy also collapsed. "I was frightened that people believed in it all, the whole package, and I must be the only one with these feelings. It was a moment of revelation, but at the same time it would have been wicked ever to mention it." In addition, she was "being taught about infinity, which I found mind-boggling. It made me feel we were all tiny, tiny specks: and if I was, then they - the Royal Family - were, too." Like the first Mole book, The Queen and I was adapted for the stage with songs by Ian Dury and Mickey Gallagher. Michael Billington writes that Townsend "was ahead of the game" in treating the royal family as a suitable subject for drama. He writes: "Far from seeming like a piece of republican propaganda, the play actually made the royals endearing." A later book in a similar vein, Queen Camilla (2006), was less well received. On 25 February 2009, Leicester City Council announced that Townsend would be given the Honorary Freedom of Leicester (where she lived). Townsend became a Fellow of the Royal Society of Literature (FRSL) in 1993. Amongst her honours and awards, she received honorary doctorates from the University of Leicester, from Loughborough University and De Montfort University, Leicester.

Did she write any books during her later years?
The Queen and I