I certainly do not know how every state sets up their Judicial system but in my experience most states have a County Court System where jury trials take place. Appeals are taken to an intermediate court (usually referred to as Appellate) and above that is the final and highest court (usually referred to as the Supreme Court; but interestingly enough, NY refers to their trial court as Supreme Court).

There is usually a separate local system commonly referred to as Municipal Court. I spent my career in the trial courts at the County or Federal District Court level, so I don't have intimate knowledge of the ins and outs of Municipal Courts. But, to the extent I had any interactions at that level, the majority of the cases in Municipal Court are traffic offenses (some can be quite serious such as DWI or when someone died in a car crash). But it has been my experience that most Municipal Courts do not have a jury box and do not handle jury cases (although I have a vague memory of being in a municipal court in a large city that had a jury box).

Municipal Court often have different Rules of Court than do the County Courts. Often appeals of Municipal Court are handled at the County Trial Court level with a brand new trial, instead of by the County Appellate level.

And Municipal Courts work hand in hand with the local prosecutor and local police (this is a local town court remember). Cases often are seen by the prosecutor for the first time when he arrives in Court (usually open just one night a week in towns, but during the day and perhaps every day for larger cities). Usually the police are free to dismiss charges on their own depending upon the seriousness of the charge and whether or not the prosecutor has become involved in the case.

In this case we know the charges were dropped by the police department, not the prosecutor, so that suggests to me the prosecutor was likely never aware of the incident or the charges.