There has been a lot written about creating good sites of adventure, and some written about building good cities, and even a few articles here and there about building good towns. This falls into the latter category, since town-building is something that I do often.
When I was first introduced to D&D it was by reading the supplements for things like Forgotten Realms. I always felt as though my own personal creations should strive to match things like the Guide to Shadowdale in terms of completeness and detail. Thus, even from a very young age as a DM I liked to map out my towns and to write down the names and some details about the personalities of all the major NPCs. If I miss anyone or anything important, I name them in play and immediately add that name to the list of town-NPCs for later so that the next time PCs come to that place the NPCs haven't radically changed.
One of the tools that I've found extremely helpful is the (by now probably very well known) article on Medieval Demographics by S. John Ross. It serves as a good tool of approximation for many kinds of amenities a town, village, or city might have. However, without some basic knowledge of how a medieval township might have operated, you're as good as spitting in the wind: you may hit what you want, but more likely you'll just wind up covered in spit.
Again, we approach the problem of the sliding or mobile time-period. There's nothing that is steadfastly "medieval," since the medieval encompasses so many different periods, developments, etc. For myself, I focus on the 12th and 13th century for the central kingdoms of Arunia, with more far-flung places tending either towards totally fantastical formations or things more redolent of the 8th and 9th centuries.
That means that we have several important things in every village. The first is going to be the mill. Milling considerations are paramount to think about, since they generate a huge monetary inequality between the peasants of your average town and because they are generally the primary engine of local politics. In most medieval kingdoms, milling rights were owned by the local lord. While hand-querns existed, owning them was illegal. Rather, you had to visit the lord's mill and pay a fee to mill your grain there.
The post of miller was therefore a lucrative one that could catapult you from a poor farmer to an extremely wealthy man, maybe even allow you to buy up extra land and rent it yourself to other peasants or cotters in the village. Millers were universally despised for cheating townsfolk out of money by adding sawdust to their ground grains or lying about weights. This trope was so ingrained that even Chaucer capitalized on it.
For a mill to operate you need water or physical power provided by a mule, since wind-milling didn't come into real use until around the 18th and 19th centuries. A town might have a post-mill (not a tower mill) but that would be a rare occurrence. Amongst other, more practical, considerations this is why many towns are built on a river. Rivers, of course, provide water for making ale and washing clothes and also wash away your nightsoil (shit) when you dump out your chamber-pots in the morning... if you're wealthy enough to afford chamber pots.
In the case of a water-mill, generally a dam would be set up along the river and a mill-pond created so that a small amount of water could be forced through the dam and provide the motive to turn the mill-wheel.
Now, a small town is going to need either a blacksmith or a short route to one in a larger center nearby. Many bits of ironmongery break over the course of the year and that is one thing that a peasant farmer cannot replace, unlike anything made of leather, bone, wood, or cloth, which can all be made in the home (and generally were). Thus, the local blacksmith is a friend to all farmers, save for the fact that he can charge as he likes for smithing work. Generally, small ironmongery was thought to be done coinlessly in a barter exchange: give me a few eggs and I'll fix your spade, give me a cow and I'll fix your plough.
Do note that blacksmith and weapon/armorsmiths are not interchangeable. While a weaponsmith or an armorsmith may know how to do simple ironwork, there is no guarantee that this is the case. Also, be wary of trying to have a blacksmith repair your broken weapons or armor--what you get back probably won't be usable as either.
You're going to have a good amount of fields even for a small village, since with an ox- or horse-drawn plough you can cover a lot of land. Serfs (unfree men) were generally needed to work several days on the lord's own land and then the rest of the days on theirs. Peasants, who owed no "servile" duties, were expected to work perhaps one day a week on the lord's land, with the rest of the time given up to their own labor. Of course, serfs didn't have to pay taxes; a peasant might pay one third of all the food he had harvested and made over the course of the growing season, so sometimes serfs could actually be better off in terms of money than peasants. Of course, they still weren't supposed to leave the town, buy land, or marry free people, but sometimes one or all three of those things happened anyway.
To keep the peasants in line you have to have some representative of the lord around; that was the Reeve in England and the Bailiff in France, a position appointed by the lord and given the power to do justice, hold people in imprisonment (only as they waited for trial, prison wasn't a punishment in the Middle Ages; you either paid a fine or were executed, depending on the level of the crime) and make sure the taxes were all correct. Reeves generally rose a rank above their neighbors, at least to the level of wealth as the miller and sometimes beyond.
Even with just this small number of people, you can already see that "sleepy" village life is not so sleepy. There is constant jockeying for position going on, and loyalties to the miller, or to the reeve, or to the blacksmith might make for some interesting adventures. This is before we begin to factor in things like kobolds sneaking in the night and stealing off babies and cattle to eat.
An important note to keep in mind is that the fantasy trope of guards and town watch is nearly completely fiction. If you want your setting to make any sort of sense, you'll remove these characters completely from your towns and villages, add them sparingly in cities, and perhaps establish an equivalent to the Urban Cohorts in your capitol.
Indeed, citizens were expected to make arrests themselves, raising the "hue and cry." The local Reeve would gather up a posse of locals and attempt to confine anyone causing trouble. This means that adventurers running rampant through a small town will be in, not for a confrontation with heavily armed guards, but for a running battle with peasants armed with shortbows, pitchforks, and knives. Of course, that's not saying the Reeve won't immediately run to go inform the local knights and lord that bandits are sacking his town. When the word reaches the lord's manor, you can expect a number of men-at-arms, mounted knights, and the lord himself to ride forth. In some towns this also implies that a wizard who has residence with the lord or advises him in some way may also emerge to do battle. Local priests, as well, may present more formidable foes if they have any levels and the power to enact magic.
This is just a little taste of what town life can be like, but it is far from dull. Even a sleepy thorpe or hamlet has its factions, its hated characters, and its troubles. Whether or not your PCs even care is another matter entirely.