Villagers, squidwards, testificates or one of the many other nicknames that have been given to this odd looking mob, are the inhabitants of the randomly generated villages you can find around minecraft.
Killing a villager will not cause it to drop anything, not even experience. A new villager may spawn, but only if the size of the village allows it.
Occurence and behavior
Villages can be found in any biome, though some will be made out of different materials in specific biomes. The villages have different types of houses, which are occupied by different types of villagers. The type of villager depends on their profession. Currently there are 5 professions, farmer, librarian, priest, blacksmith and butcher.
If a villager dies, the villagers will repopulate, creating a tiny version of themselves. They will do so every time a house is empty, even a player made house, that has at least a door and a 3×3 area inside. The villager children will run around and often chase each other, they may even cautiously take a flower from an iron golem if it’s holding one.
Villagers also have a more intelligent AI. They will appear to be communicating with each other or the player by staring at them and bobbing their head up and down. This is the only interaction a player can have with villagers so far, though the trading system will bring change to that.
Villagers have the unique ability to be able to use doors, which means they can go in and out of their houses and they will do so when it rains, when it’s night and when the village is under attack by zombies. Like all passive mobs, villagers are attracted to light, however, villagers prefer houses over lighted areas, no matter whether the house has any source of light or not.
However, when you kill or attack a villager, the villager won’t fight back and none of the other villagers will try to stop you or retaliate after you’ve killed on of them. Their iron golems will attack you, however.
Villagers and iron golems will do nothing when you break down their houses or steal from their chests. The chests at the blacksmith can contain great items, like obsidian and diamond. The library is a great source for free books by destroying the bookshelves.
Sometimes a zombie raid can occur, which is a random event in which large groups of zombies attack the village and try to break down the doors. They will eventually succeed and try to kill any villager caught inside. The villagers will try to run away, though the zombies will chase them. The villagers only source of defence are the iron golems, who will attack the zombies and try to overcome this raid.
It’s impossible to breed villagers, however, by creating more houses for them, new villagers will spawn. The only benifit is that more villagers means more iron golems can spawn. One iron golem will spawn per 16 villagers (and 21 houses).