Okay, so the town is deserted. As the people die....well, this is the blurb on the site with the photos:
"Welcome to Nagoro, Japan. Human population: 37. Doll population: 350. Ayano Tsukimi lives in this small village on Shikoku, one of Japan's four main islands. When villagers die or move away from Nagoro, Tsukimi makes a life-size doll and places it in a spot that was meaningful to that person. Now the doll-scattered town has started attracting tourists. Journey through Nagoro in this short film by filmmaker Fritz Schumann."
I highly recommend you click on the National Geographic link above for the full story and all the pictures. Very odd indeed.