"Village idiot" is a derogatory term for an inexperienced Dominion player who buys too many Villages. Although Village is almost never a harmful card to have in one's deck, and its +2 Actions bonus looks appealing, it carries a potentially heavy opportunity cost: every turn you buy a Village is a turn you could have bought a Silver or a terminal Action card and didn't. Since Village produces no + , buying Villages doesn't improve your ability to buy cards in any way. Its only value is in increasing the number of terminal Actions you can play each turn; but over-investing in Villages without getting payload or draw leaves the Village Idiot player without enough money to regularly buy the powerful terminal Actions that make the Villages useful.
In some cases it can be necessary to rush for Villages or similar cards before you have the terminals to make them useful, however—when villages are at risk of running out, you may need to act quickly to make sure you can secure enough villages to support your engine. In a multiplayer game, there's more competition for a limited supply of villages, so there may be pressure to grab them early. Port is a village which disappears from the supply quickly even in a two-player game.
"Village Idiot" was also the name of an outtake from Alchemy; it was a discard attack that gave +2 Actions.