On different definitions of neighbourhood.

Solution 1:

Let's call the two definitions "Munkres neighborhood" and "broader neighborhood."

Let $\tau$ be a topology on $X$ and $x\in X$. Define a new topology on $X$ as $$\tau_x=\left\{V\subseteq X\mid x\notin V \lor \left(\exists U\in\tau:\, x\in U\subseteq V\right)\right\}$$ This is easily proved to be a topology.

So the Munkres neighborhood of $x$ in $(X,\tau_x)$ coincides with the definition of the broader neighborhood of $x$ in $(X,\tau)$.

$\tau_x$ is a localized version of the topology $\tau$ at $x$, and we have that $\tau = \bigcap_{x\in X} \tau_x$. This means $f:(X,\tau)\to Y$ is continuous if and only if for all $x\in X$, $f:(X,\tau_x)\to Y$ is continuous.

The topology $\tau_x$ lets you define "continuity at $x$." That is, in point-set topology, we can only define a function as continuous, not "continuous at a point." In metric spaces, though, we can define continuity at a point $x$, and it coincides with the definition $f:(X,\tau_x)\to Y$. So if we use $(X,\tau_x)\to Y$ being continuous to define "continuity at a point," we see that if $f$ is continuous at every point, it is continuous.

I suspect Munkres' definition is the most common in modern works. Perhaps in early topology days, people were concerned about generalizing the idea of continuity at individual points. The above construction shows that "continuity at a point" is, perversely, just a special case of the more global notion of continuity. Rather than localizing the definition of "continuity" we localize the topology. Munkres definition still supports the broader definition by moving to this localized topology $\tau_x$.

Note, also, that you can get a dual notion, $$\tau^x=\{U\in \tau\mid x\in U\lor U=\emptyset\}$$

Then $\tau = \bigcup_{x\in X} \tau^x$. (Usually, the union of topologies is not a topology, but in this case, the union can be seen to be the original topology. More generally, be careful to take joins of topologies, however.)

$\tau^x$ is the topology containing the Munkres neighborhoods of $x$ (and the empty set) and is related to continuity of functions to $x$, a concept which is foreign to people familiar with the metric definition of continuity. What would it mean for $f^{-1}(U)$ to be open only for the open sets containing $x$?

However, $\tau^x$ has the same property: If $f:Y\to X$ is continuous to $x$ for each $x\in X$, then $f$ is continuous.

If $(X,\tau)$ and $(Y,\rho)$ are two topologies, then $f:(X,\tau)\to (Y,\rho)$ is continuous if and only if, $f:(X,\tau_x)\to(Y,\rho^y)$ is continuous for all $x\in X,y\in Y$.