The village is an ideal setting for character development, especially a mystery. Even some of the detectives in the hard boiled genre chase their suspects in locales far from New York or London. The Simon Serrailler series by Susan Hill is set in the cathedral town of Lafferton, England, an idyllic seeming town. Yet crimes happen there, and the small town setting emphasizes them.
Character-driven mysteries (my favorites) typically involve a small number of characters. Time is required to develop each character, including, of course, suspects. Thus, small communities are ideal, since the inhabitants are more likely to be known to each other (supposedly). Characters can easily be introduced through other characters.
One of my novels (Quiet Deception) is set in a small college town and is my only straight mystery. The others contain a twist of mystery, but I’m more interested in how the characters evolve and the moral dilemmas they face.
Several of my novels are set in diplomatic communities. Having experienced these, I know how ideal this setting is for character development. A few Americans are assigned to work together and live in a foreign country for the common purpose of representing the United States through various tasks. Normally, they will include ambitious, work driven types as well as those highly motivated to serve their country. Sprinkle in a few significant others in close proximity and add a complex character with an enigmatic past. Then mix in problems from the foreign surroundings, such as hostility toward Americans. You have a ready-made setting for conflict.