To get started with your village, you'll need to build 3 things: A Town Hall, a Builder's Hut, and a Citizen's Hut. To get it just craft a Supply ship.
You'll also need to craft a Citizen's hut, so that settlers can become villagers, and can then take up worker positions, such as the builder, which will be the final piece necessary to start your village. These, and all other buildings, have to be within 100 blocks of the town hall. Craft it by placing you builders wand at the top middle and a torch in the middle then surround by wood planks.
And finally, you'll need to craft a Builder's Hut, where your Builder can start construction on your buildings. Craft by builders wand at the top middle door in the middle then surround by wood planks.
Once all of these buildings are crafted and places, all you have to do is wait for settlers to come around, become villagers, one of them to become a builder, and you're all set to start building your village.
to task the builder to build or upgrade the house, go into the chest and click build house(even if you are upgrading the house).