Ninja villages don't have to be that big. The way I see it there are the five main hidden villages that serve as the main military bodies for their respective countries. Each of the five villages is ruled by a kage.
There are also exist several smaller ninja villages that are scattered around the world. Such as the hidden falls village that we saw in that jump festa special. I guess you could say that they serve as small mercenary camps considering that they probably only police a small radius of land.
Hidden Sound village could easily be entirely contained inside Orchimaros's cave of evil. He's got alot of room in there. From the complex medical equipment, to large storage space for his various experiments and prisoners.
My question is if the leaf knows that Orchimaro is head of the sound village why don't they just send in a platoon and take it out. I know they don't have the resources now to do something of that scale but what about the other main Ninja Villages? Wouldn't they also jump at the opportunity to take down a wanted S-rank criminal?