This paper examines two acts in the history of village settlement. First, village as part of the fort-and-settlement complex. Second, the disintegration of this complex and development of a new network of power relations, as well as a settlement pattern. Those events reflect the stages in the processes of the urbanization and feudalization of society. The paper is based on the archaeological research of the village of Linnaaluste in the vicinity of the hill fort of Keava in northern Estonia.