In this scale, anything more than a single, small structure requires either a dedicated room or an outdoor setting. As every two inches equals a foot, a small 24'x48' three bedroom home will take up a 4'x8' footprint... the area of a standard sheet of plywood, or the area of a single bed with a five inch border all around. Either way you look at it, outdoors will have its appeal in this matter.
When building a village, township, corner of a city block, etc., things will get out of control very quickly. It's best to start with a large flat(ish) area that can be sacrificed to the effort - 24'x36' would be a dream, but even a 12'x6' area is enough to build a small village. I am fortunate enough to have the slab of a blown garage to build upon, as well as living in apple country where 4'x4'x2' apple bins are a common commodity. By stacking the aforementioned bins, I can create a remarkable assortment of town structures representing a variety of architectural styles. The boxes are sturdy, cheap (or free), easy to cut windows, doors or whatever. Disassembly is not difficult if one requires portions here and there (floor, roof, interior walls come to mind). Redwood lathe stained with Jacobean woodstain will mimic the beams of Tudor structures, carved 1'x4' planks can resemble brick or stone foundation. I prefer real glass for windows, it's cheaper than heavy plexiglass and will not yellow. Doors can be made from scrap pieces out of your scap box, balconies as well. Garden short barriers of the 8" or thereabouts variety become fences. Use you imagination.
The art of salvage becomes a major source of material. Demolition scraps are a great source of plywood, plus 2x4s, as long as you pull the nails. Free wood is always good, remember that. Discarded Christmas mini-light sets become the basis of your town lighting. Wire the sockets in parallel instead of in series and use 12v bulbs - the Bachmann model railroad transformer will prove to be an excellent power source as long as you keep it under 13 volts. Some incredible structures can be built with liquid nails and large, squarish gravel if you are patient enough. Be sure to wipe with (slightly) watered down mortar repair/sealant by the same company once you are done. This gives the impression of mortar and prevents water from getting between the stones and forcing them apart once it freezes. Shingles can be done from any structural timber - cedar would be ideal, but fir will do... there's always Thompson's Water seal, after all.
Which brings up another thought. With an outdoor project, rain, snow and critters are issues. Use 10lb or better tarpaper under your roofing. Start your painting with an oil-based primer. Use exterior grade paints. Make certain that doors and windows close tight when not in use - just Google "brown recluse spider" and you will have incentive - don't shove your hand blindly into a structure that has not seen use in a while! You might want to have a panel open in the back (with tight latches) so you can position figures inside easily and see anything that might take offence at your presence. If you build live chimneys, make a plug. Make certain that you have a tight connection between underside of roof and top of wall.
Of course, a plan of action might come in handy. If you are like me, you will sketch plans for the whole operation several times untill you know exactly what you want. Even then you might finish with something unforseen. "No plan of Battle survives first contact!" see Napoleon's first Rule of Combat. I will be contributing in this venue as things work out, but for now I hope this gives you some ideas and guidelines to consider when building your village/township/encampment/whatever. Check with local codes before building the Eiffel Tower.