edge of a village; outskirts of a village
Refers to the area just outside or at the boundary of a village, often with a rural or slightly remote feel.
I visited a small shrine on the outskirts of the village.
The house is in a quiet spot at the edge of the village.
Standard spelling using はずれ in kana; the most common written form.
Alternate kanji spelling using 外れ; also seen but less common than 村はずれ.
Compound of 村 (mura, 'village') and はずれ (hazure, 'edge, outskirts'). The exact historical derivation is straightforward; the word is a transparent compound.