The dimension travelling alien on board the Castor created Herot as a way to escape from the pain of the crimes committed by prisoners that it was forced to experience in order to rid the prisoners of their guilt. As such, the village's history is only as long as the creator's captivity.
Late in its history, children began disappearing from the village. This, as well as missing information in historical records, insubstantial buildings and the local countryside being warped, was indicative of the lack of power going to the Castor and the lack of enthusiasm of the semi-suicidal alien creator. These strange goings on were set right after the Tenth Doctor steered the Castor to a new section of space, allowing its solar cells to function once more. (PROSE: Wooden Heart)
Despite the lack of churches, many villagers held a belief in the existence of a "creator", which the Dazai, Jude, Saul and Petr eventually met. Herot's inhabitants also had mythology, notably the belief that if the stolen children were to return to the village then Herot would be destroyed. This belief, although not founded in science, was, in fact, correct, as if the children did return, then the "creator" would not be able to sustain the pocket dimension because of the large amount of data required to imagine children.
By the time of Petr, travellers and traders from outside the village were known to exist, but not particularly common. The world outside of the village was inaccessible for a time, during which the Castor was losing power and Herot's creator the will to continue.