We have villages, we have ocean ruins, why not something like Atlantis? They could look like normal villages but be made of prismarine and quartz, with mermaids that you could trade with. Their trades would involve much more valuable items than villagers, as it would take more effort to reach them and their civilization would be more advanced. The mermaids could farm kelp and/or coral. Maybe the villages could spawn nearby or around ocean temples, like the temples are the capitals.
Mermaid civilizaion is aaa nice idea, i think it could be a better idea tthat the undersea villages could be a remnant of a ancient glorious civilization but that has lost the greatness of the time of the glorious era of the great. Sea monuments.
Like the Greeks after the disappearance of Minoic reign
So the mermaids are scattered on the floor of the sea liviing in little towns with little or none link to oter mermaid groups
To justify the existence of the mermaids beside having villages in the sea they should do something of unique, what it could be?
Maybe they could trade in rare equipment or in unique enchantments that only the secret lore of Atlantis could do
The mermaid could be a neutral mob that unlike the villagers can fight back with their nasty tridents