People have very different ideas about what a village is. Geographers say a place is a village if it has a number of different shops. If it is smaller than this it should really be called a hamlet.
Very few people who live in small places say they live in hamlets. So, in general, people say that they live in a village if they live in any very small place.
Villages can be up to several thousands, but still do not have things like a town hall. That is what keeps them as villages.