Don't despair. Townlands are, as you found out, areas of land within a parish.
However, they are commonly referred to as "villages", although they are not villages in the sense of having a church, school, shop, etc.
They are still referred to, today, as villages, but legally and on census records etc they are called townlands. (I know, I was born in one, and we only referred to it as a townland on official documentation, we would still refer to theses areas as villages).