Hamlets become villages after satisfying the requirements of having 9 parcels of land, 25 people, and a Tavern.
As a village is typically only 3 - 5 player characters, all land-owning members are automatically considered Elders and "should" have a say in village matters.
Implications of Land Ownership
If a player was to own 20% of a village's land and were to sell that to another player, the player who received the land would become an Elder. If an existing Elder were to buy the land, they may become a majority shareholder, allowing them to take over decisions for the village.
Becoming a Town
A village will become a town when it has at least 25 parcels of land, 75 people, and a town hall.