There really are monsters in the woods.Bear with me. We know that the village elders impersonate monsters occasionally, we also know that Noah found out and has done it as well. However there are some inconsistencies with actions of the creatures we see on screen and what we know of different people's motives. The village's livestock has been slaughtered since the beginning of the film, like wholesale, and this seems a very un-village elder thing to do. Several occasions on which it was done Noah was with other people as well as all the elders. The day where Lucius went into the woods and was spotted was in the middle of broad daylight, Noah and the elders were all in town or in places where they would have been visible. Also, all of the elders had family members who might have found it a tad odd that they were gone mysteriously whenever a creature attacked. So I contend that while the elders may have impersonated creatures at some time or place, there really were creatures in the woods.
The Village really isn't a "secret" as it is really the result of well-placed politicians and bureaucrats being greased.Given the village's proximity to a highway and being in such a "public place" its existence remains undiscovered. How is that possible?
The monsters are real, and they are The Slender Men.Enough said...
The Village is in "The Village".Well, symbolically anyway. It's one of the children's books in the Village library, which the authorities use to present the Village as an idealized society and indoctrinate young minds. Number Six is reading this story to some children, but, in order to further taunt his captors, changes the story to deconstruct the ideals the book wanted to praise. One of his personal touches was adding the character of Noah, who is based off his encounter with "The Kid" from the episode, Living in Harmony. In the original version, brave Lucius woos helpless Ivy Walker and helps the authorities drive off cloaked, demonic invaders. Number Six's version is the one we see in the film. Lucius is more of a somber, mopey character; the authorities are suspicious, secretive figures; the monsters are a ruse designed by the authorities to maintain control; and the Village lacks the latest medical advancements. Lucius is modeled after the acting Number Two of the time; his getting stabbed by a character Six added in and effectively leaving the story entirely is meant to represent that some factors are, in fact, well beyond Number Two's control.
As time goes by, more people are hired on the outside to ensure the village is scrubbed from Google Earth.