There was a village there; it wasn't invented out of whole cardboard. It was not a feigned existence of a non-existent thing

Faldage, I am not sure with what authority the writer of the writer of the quoted e-mail speaks.
The AHD definition at http://www.bartleby.com/61/0/P0480000.html (quoted below, emphasis added] seems to me to support of my reading that the term is limited a feigned but non-existent entity.

Potemkin village NOUN: Something that appears elaborate and impressive but in actual fact lacks substance: “the Potemkin village of this country's borrowed prosperity” (Lewis H. Lapham). ETYMOLOGY: After Grigori Aleksandrovich Potemkin, who had elaborate fake villages constructed for Catherine the Great's tours of the Ukraine and the Crimea.

The WAD-description differs from this etymology, in that it assumes a real (though whitewashed) village exists. (WAD: put up elaborate cardboard houses ... in the villages) I suggest this asumption is contrary to the published dictionary authority.