The people who built the Nazareth Village was looking for a place in Nazareth to be as authentic as possible. The city of Nazareth is a crowded city with 60 to 70 thousand people. Yet there is just this one small patch of land, up a sloping hill behind the YMCA. So the developers bought the land to develop the village they have in their mind.
Surprisingly enough, when the land was cleared, they found the remains of a first century village that was already on the same plot of land! Archeologists were brought in to excavate the land. As a result, some of the buildings that we can now see in the Nazareth Village actually stand on the original foundation!