If we are speaking of building on official servers, not single player or private, then yes, several players have attempted to build villages. However, they are becoming a no-no under the revised building TOS
" Walls and Villages
This can be considered an extreme version of decorative land claim. The issue here is not the size of the base, but the function of the individual buildings. It is in the same spirit of a web of foundations, but players take the time to make the structures appear from the outside to be a functional part of their base. Player buildings that heavily focus on roleplaying can often fall under this category.
Walls are ok when they do not extend too far beyond the buildings they protect. But much like the web of foundations example, a wall of sufficient size can still accomplish the same thing. A wall for defense is a reasonable addition to your base, but using them to mark off a large area around your base should be avoided."