Paihia is the main tourist town in the Bay of Islands. Originally established as a mission under the name Marsden’s Vale, however Paihia, eventually became the accepted name of the settlement.
Paihia is close to Waitangi historical site, the Hururu Falls, and only a short ferry ride to Russell. There are many accommodation options in town, however I would recommend Russell over Paihia any day as the town is more of a backpacker & commercial center than somewhere you would want to spend a lot of time.
One thing I love about New Zealand is that because there are no foxes in the country you sometimes find chickens roaming free. This was the case when we visited the Haruru Falls where we met the guys pictured below, who were very domesticated and happy to say hi.