"That is a beautiful village."
Translation:Tio estas bela vilaĝo.
Yes, for example if you're pointing to a specific village among other villages. It would translate as "that one".
- vilaĝo is a village, like when someone lives in the country
- urbeto is a small town (with a town council residing in a town hall)
All in all, one's perception of cities, towns and villages largely depends on their other languages so it's not critical if you get it "wrong" in a conversation.