The Eagles beat Stoke 4-1 after recording back-to-back wins for the first since Christmas.
Palace have taken seven points from three games since the transfer window closed and Townsend feels the team is now settled and on the up.
"We had a slow start to the season but that was another good win yesterday," said the winger. "Everything we have been working towards came together.
"There was a lot of uncertainty in the first few weeks of the season, with players leaving and coming in, and maybe that unsettled the club a bit.
"Middlesbrough was the first game after the window had closed and that was when our season really started. Everyone was focused and we got to work. We have got some great players here and I am sure you will see more performances like that."