If you choose one town elder for the villain to kill ("Choices to be made"), can you play "I think not" to prevent one source from moving the shadow track as the card states? I'm not sure what one source means in general.
Yes you could. a single 'Source' just means one card or game event that is going to move the Shadow Track - such as a Town Elder being killed or a card that says, "Move the Shadow Track 1 step closer to Darkness."
The reason it is listed a a single 'Source' is that sometimes there will be a chain of things that move the Shadow Track. For instance, you might get the card 'Agents of Evil' which rolls on the Villain's Minion Chart and move the Shadow Track 1 step. If the roll on the Minion Chart also calls for the Shadow Track to move, this would be considered two 'Sources' (one for the 'Agents of Evil' card and one for the Minion Chart result).